September 4, 2022
By: Dwayne Page
The City of Smithville is contracting with a company to perform a study of water and sewer rates. The idea is to get a professional opinion on what the rates ought to be to keep the city’s water and sewer utility financially solvent as is required by the state.
During Thursday night’s regular monthly meeting, the aldermen voted to enter into an agreement with Buddy Petty of RateStudies based in Hermitage to conduct the study. The cost to the city to do the analysis is $9,000.
“We just need to know how to move forward,” said Mayor Josh Miller. “I talked to the state comptroller’s office a couple of years ago and they recommended that the city go up on rates two percent every year in the water and sewer account”.
The city raised water rates by two percent last year and again by four percent this year.
City customers now pay $7.70 per thousand gallons of usage. Rates for customers outside the city limits are $11.55 per thousand. City sewer customers pay $7.17 per thousand.
“What I want the public to understand is that while I want to pay the cheapest (water and sewer rates) I can too, we (city) have to make money (show a profit) because if we don’t and lose money in two consecutive years, they (state) can come in and set the rates. We don’t want the state to do that,” said Mayor Miller.
He also explained that under state law money from the city’s general fund cannot be transferred to shore up the water and sewer department.
“We cannot mix funds. We can’t mix general funds with water and sewer funds. It has to support itself,” said Mayor Miller.
“I think we just need to know where we are moving forward because we don’t want any trouble with the state comptroller’s office,” Mayor Miller said.
According to the 2022-23 city budget, the water and sewer fund is expected to show a small surplus of $6,403 by June 30, 2023.
Results of the water rate study are expected by the end of December.