Sean C. Morgan
As city officials prepare the budget for 2019-20, they plan to include an incremental increase in water rates, while maintaining the sewer rate as it is.
Finance Director Brandon Neish told the City Council’s Administration, Property and Finance Committee earlier this month that staff are not proposing to increase wastewater rates next year. Those increased in January to cover a deficit in the last budget year, which runs from July 1 to June 30.
Additionally, the rate included extra revenue to help pay for the upcoming Wastewater Treatment Plant upgrades, Neish said. The rate could provide up to $7 million, more than 25 percent of the cost of the upgrade, which means the city will need to borrow less money.
Water rates depend on what the City Council wants to do long term in water capital projects, Neish said.
At current spending levels and rates, the city will have just $10,000 available for water capital projects in 2019-20.
Capital projects include work like the leak repair program under way in the city this year.
To provide funds for capital improvements, Neish said, the staff is suggesting a 5 percent increase in water rates, which would work out to about $2 per month on monthly residential bills.
Costs always go up, said City Manager Ray Towry. “There’s no way to expect you’re not going to have a small incremental raise every year.”
Neish suggested that the council look at increasing it at that level annually based on five-year projections and the city’s Capital Improvement Plan.
City Councilor Dave Trask said that if the council had done incremental increases over the years, it would have had less impact on ratepayers than the larger more irregular increases the council made to cover costs.
“But in those times, it just didn’t work,” Trask said.
“My goal and my job here is to make sure this city operates the best way for its citizens,” Neish said.
Towry told the committee that Sweet Home’s systems development charges are “ridiculously low.” Sweet Home’s are $1,800 per house. Brownsville is $9,000 per house, and other cities charge as much as $40,000.
Systems development charges are imposed on developers to help pay for expanding utilities, which are a part of capital expenses.
Neish said he will incorporate the rate increase into the upcoming proposed budget, which is reviewed by the Budget Committee and then the City Council. The City Council must adopt a budget for the next fiscal year by June 30.
The Administration, Property and Finance Committee discussed the rates during a meeting held on Feb. 15.
Members and councilors James Goble, Diane Gerson and Trask were present.