City Council members are debating how to address water and sewer funds in the upcoming budget.
The debate lies in whether or not to raise the minimum bill on water and sewer, which would balance the water and sewer budget for the first time since 2008.
The proposed budget includes a $1 increase on the minimum bill for water and sewer, and a $2 increase on water and sewer for Calhoun Utility users who live in the county, but there would be no increase to senior citizens. The only rate changes would be to one and two inch (pipe) commercial users.
In essence, the minimum bill is an access fee that is paid every month, and does not fluctuate monthly like the rate charge for usage of water.
In 2008 rates were increased by $0.06 per 1,000 gallons, but the minimums were decreased from $9 to $5.91. Before the end of the year the minimums were raised back to $7. Sewer rates fell from $7 to $1.30 in 2008 and then jumped back to $2.30. Vickery believes the reduction in cost created a decrease in revenue that no one expected, and has affected the department every since.
The increases would result in approximately $400,000 in revenue for water and $153,600 for sewer.
Vickery said the minimum increase is needed to take care of aging equipment, and the rate charged per 1,000 gallons of usage is used for the commodity of water and the treatment, but the minimum exists to take care of pipes, labor, tanks, wells, meters and every other piece of equipment that causes the water and sewer department to run fluidly.
Mayor Jimmy Palmer said from year to year prices go up - that is the cost of doing business, and water and sewer has been loosing money for a while now. The only way it keeps going are transfers, but now there is a chance to bring it back to a break-even point. Palmer said it is time to put something in place to allow the city to more forward.
According to Vickery the department is loosing money because, “dramatic effects of the ‘great’ recession, unemployment and yarn technology changes in the carpet industry that suddenly reduced the sales of water and sewer. We have recovered much of those sales recently, however, inflationary costs for materials, equipment and fuels continued in spite of the recession.”
Council member David Hammond is opposed to the idea of the minimum increase and says he would rather see “cost saving rather than rate increases.”
“There is a large percentage of citizens that this is going to eat up a large percentage of their budget and they aren’t getting anything for it,” said Hammond.
His solution to the problem is to make better decisions on the proposed projects, and possibly decrease the usage of some of the water and sewer treatment centers from a 16 million gallon capacity down to a four million capacity, which is what the city is currently using. Hammond points out that the city is using 40 to 50 percent of its facilities capacities, and says that capacity will never be filled.
Palmer told him federal regulations require that the city must have the ability to process water and sewage at its peak usage at all times, which Palmer said is around 12 to 13 million gallons for each.
Palmer pointed out that there are too many projects that need to be done, and there are too many that come up during the year that are mandatory to complete. Palmer added, when companies come into Calhoun they always look at the electrical rates, and it makes it hard to keep those numbers competitive, when money is being transferred from electric to water and sewer to keep it running.
Council member Matt Barton is undecided on the issue. His issue is since 2008 the rates have gone up 36 percent in residential, 26 percent in commercial and 15 percent industrial. Barton believes in smart investments and doing something so the department can stand on its own with no transfers, but he said, “when is enough, enough.”
Council member George Crowley said the increase is something that is going to benefit the city for years to come, and Calhoun is well positioned for the future. When he looks at other cities around Calhoun the only municipality charging less than Calhoun is Cartersville. Other than Cartersville, Calhoun is the “cheapest by far.” There are some cities with highs of $28.
“It’s going to affect our bonds and everything down the road,” Crowley said. “You have to get it where it supports itself. It’s cheaper in the long run to take care of these things now than it would be to do it down the road.”
Acquiring a low interest loan from Georgia Environmental Finance Authority is less debated but also needed to balance the budget.
In short, the GEFA loan is available to the city at a half percent interest with a 10-year pay off period.
The proposed water and sewer budget does not consist of the projects that are going to be paid for by the GEFA loan, according to City of Calhoun Director of Utilities Larry Vickery. This means there is a $4.4 million dollar deduction from the proposed budget.
“We are able to accelerate some much needed projects for a shorter completion, thereby improving service sooner than our original planning and finances would allow. All at very low additional financing cost,” said Vickery.
He added, “Water and sewer is the number one safety issue you have to deal with in the community. With out clean water in the river and in the sewer you got disease and bacteria that kills people. This stuff is important to the community and it doesn’t need to be on the forefront of everyone’s minds, but we have to pay for it.”
The second and final public hearing on the budget will be at 7 p.m. on Monday, June 10. The budget will be fully adopted Monday, June 17.