City Fathers Advised to Hike Water and Sewer Rates

July 14, 2010
by: 
Dwayne Page

The City of Smithville hasn't increased sewer rates in several years and water rates haven't been adjusted since 1998, but a rate hike may be coming soon for city water and sewer subscribers with the passage of the proposed budget for 2010-11.

During a workshop meeting Tuesday evening, Janice Plemmons-Jackson, the city's financial consultant reminded the mayor and aldermen that the water and sewer fund is currently in the "red" and she warned that if this continues for more than two years, the state could step in and force a rate hike sufficient to make the operation financially self supporting.

Jackson said according to the proposed new budget, the city's water and sewer fund was projected to finish the year on June 30th, 2010 in the red by $306,464 but actual hard numbers, when finalized, may be somewhat less. "Originally in the budget for 2010, we projected a possible $415,000 loss. In revisions we have lowered expenses somewhat and we have revised the budget to show a $306,000 loss. In looking at numbers right now which have not been finalized, I can tell you there will definitely be a loss for the 2010 year. Hard numbers. It's in the red over $100,000 and I'm not sure where the numbers are going to end up but you are in the red. So for 2010 you definitely had a loss."

According to Jackson, even with the proposed rate increases, the water and sewer fund might actually end next fiscal year June 30th, 2011 in the ‘red" again. "With the proposed rate increases that we have, I'm still projecting that you may have a loss. We try to look at what you've spent before and factor in some inflation. Sometimes we don't know what insurance increases are going to be or the electricity costs so we try to have a little room in there for more. But we're proposing a $155,000 loss in 2011 with these rate increases. We're not giving you a huge overage but you're getting at least to a better point. When you go for ten or twelve years and don't do any increases you can't just do a nickel raise and say ‘oh we've fixed the problem'. What concerns me is the fact that 2010 does have a loss and 2011 with these rate increases may have a loss where the state could possibly come in that third year and say, if you've lost money two years in a row we're going to set your rates for you. By implementing some rate increases now I think you're getting yourself headed in the right direction."

According to the current water and sewer rates, a customer with a minimum monthly bill pays $7.12 plus tax. Under the new rates, the same customer with a minimum monthly bill would pay $10.00 plus tax.

If a customer uses 4,000 gallons per month, he now pays $30.60 plus tax. Under the new rates, the same customer using 4,000 gallons per month would pay $40.00 plus tax.

Specifically, the rate for city water customers would increase from the current level of $3.50 to $5.00 for the first one thousand gallons of water usage plus a $1.50 increase from the current rate of $3.50 to $5.00 for each additional one thousand gallons of usage. Outside city rates would increase to $7.50 for the first one thousand gallons of water usage plus $7.50 for each additional one thousand gallons of usage

The rate for city sewer customers, under the new budget, would increase from the current level of $3.62 for a flat usage rate to $5.00 for the first one thousand gallons of usage plus a $1.75 cent increase from the current rate of $3.25 to $5.00 per thousand gallons thereafter.

The rate the city charges the DeKalb Utility District for water is $1.90 per thousand gallons but would increase to $1.95 beginning with January 1st, 2011 sales.

Water tap fees for customers inside the city limits would jump from $400 to $600 for a three quarter inch water line and the sewer tap fee would go from $400 to $600 for a four inch sewer line. If the lines are larger, the fees will continue to be cost plus 10%.

For customers outside the city limits, water tap fees would increase from $525 to $800 for a three quarter inch line. Fees would go from $525 to $800 for a four inch sewer line. If the lines are larger, then the fees will continue to be cost plus 10%.

The mayor and aldermen may consider first reading passage of the new budget Monday night, July 19th at 7:00 p.m. at city hall.

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