Rate hikes on table for council

The City Council will decide July 14 whether to increase water and sewer rates.

The proposed increase ranges from 3.46 percent for those who use the least water to around 4.41 percent for bigger users.

Average winter water and sewer usage is down to approximately 650 cubic feet per month from around 700 cubic feet, the number the city has historically used to figure out average utility rate increases, said Public Works Director Mike Adams. For three-quarter inch residential services, at 700 cubic feet, the monthly water and sewer bill will increase from $76.46 to $79.49, a 3.96-percent increase.

At 1,000 cubic feet, the price tag increases from $107.81 per month to $112.31 per month, a 4.17-percent increase. At 1,500 cubic feet, the monthly bill increases from $160.06 per month to $167.01, a 4.34-percent increase. At 1,900 cubic feet, the cost is will increase from $201.86 to $210.77 per month, a 4.41 percent increase.

Comprising those prices are the base costs and commodity charges. The base price is a flat rate for each service, water and sewer. On a three-quarter inch residential service, the most common, the base price for water increases from $17.50 to $19.

For sewer it increases from $26.63 to $26.72. Other base prices, for larger services, usually commercial and industrial, will not change, remaining at $22.40 for a 1-inch service and $28.30 for 1.5-inch service, for example. Larger services pay only a commodity charge for sewer.

The commodity charge for water, the price per 100 cubic feet, increases from $4.50 to $.74 for all residential services. The base price for sewer increases from $5.95 to $6.20.

For low-commercial services, the water charge increases from $3.90 to $4.31 per 100 cubic feet and the sewer charge increases from $5.04 to $5.25 per 100 cubic feet. For medium commercial, the sewer rate increases from $6.28 to $6.58, and for high commercial services, the rate increases from $8.41 to $8.90.

To calculate a bill, the city will multiply the commodity charge by hundred cubic feet of water and add that to the base price for both water and sewer services. It will then add the water and sewer charges together to find the total bill. The monthly bill also comes with a $1 storm water charge, which will not increase.

Based on a spreadsheet document Adams uses to calculate the rate required to pay the costs of the utilities, he presented higher rate increases as a starting point, including a $28 base charge for water, to the council at a work session at the end of June.

“We knew right away that wasn’t going to fly,” he said. “We played with some of the spreadsheets at that point to try to minimize the increase effect to the local citizens yet still trying to maintain the ability of our utilities to pay for themselves on an annual basis. From that meeting, I got an idea about where the rates need to be.”

Cash carryover from the utility has helped hedge what the city needs to charge, he said. The rates are based on budgeted projections.

He will propose the council keep the storm water rate at $1 per month, he said, as part of an effort to minimize increases on residents. The rate was initially imposed last year.

Between last year and this year, it will help support one full-time equivalent maintenance worker, Adams said. His staff won’t expand though because he lost a maintenance worker from the state gas tax fund in the 2009-10 budget.

It will help maintain the status quo, he said.

The new water plant, which is scheduled to go online this month is figured into the new rates, Adams said. A few years ago, the city started including it to minimize the impact of constructing the water plant.

Once the city receives a final payment schedule on the $13 million plant, it may impact the rate a little, he said, but the majority of the debt service is included in the rates already.

If approved by the City Council, the rates take effect retroactively to July 1, Adams said. Customers would see it first in August, but that bill will only partially reflect the increase because the billing cycle runs from the middle of the month to the middle of the next month. September’s bill will be the first where it is fully reflected in the bill.