Increase for water may be on tap

Published 5:00 am Friday, August 12, 2005

Years of level water and sewer rates have put Brookhaven in a”catch-up mode” and in need of raising those fees to cover risingexpenses, a financial consultant told city officials Thursday.

Consultant Demery Grubbs said water and sewer expenditures haveincreased an average of 5.07 percent a year over the last fiveyears. Revenue, however, has gone up an average of only 1.32percent over the same period.

“The problem is you’ve got to do some catching up,” Grubbs saidduring a work session Thursday night.

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Grubbs said the city has not raised water and sewer rates in thelast 10 years, and rates were even lowered one year during thattime period. He said rates need to be raised every year in order tokeep up with rising costs of operations.

“The bottom line is … you don’t have a constant ladder you’reclimbing or a constant revenue stream,” Grubbs said.

Brookhaven is not alone in its water department woes, Grubbssaid.

“Water and sewer departments that have periodic rate increasesare in trouble,” Grubbs said.

Citing difficulties with a one-time 25 percent to 30 percentincrease, Grubbs instead presented options of 4 percent or 5percent annual increases over a five-year period. That would becombined with efforts to hold expenditure growth to no more than 5percent a year.

The exact impact of the increases on individual customers wasnot clear Thursday, as Grubbs’ recommendation looked at overallrevenue and not individual rates. For senior citizens and those onfixed incomes, who typically use the minimum amount of water eachmonth, Grubbs and city officials voiced concerns about keeping theimpact as low as possible.

“The low-end users we’re going to keep in mind,” Mayor BobMassengill said.

One possibility mentioned last night was smaller rate increasesfor those who use the minimum and higher increases for customerswho use lots of water each month.

According to a 5 percent rate increase projection analysis, anaverage customer whose water bill is $19.05 a month would see theirbill gradually increase to $25.53 a month over a six-yearperiod.

On the sewer side, the average user would see an increase from$12.80 a month to $17.16 a month over the same period. Customerswho have a separate water line for sprinkler systems are notcharged a sewer fee.

Customers who use less than the average could see a smallerincrease while those who use more could see a higher increase.

The analysis does not include the monthly garbage fee, which ispaid along with the water bill. The monthly garbage fee wasrecommended to be raised by $4 a month from $12 to $16 starting inOctober.

Adding to the need for water and sewer rate increases are agingequipment, old lines and annexation.

With 18 pieces of equipment more than 10 years old, Grubbs andequipment needs will become critical in the next three to fouryears. He complimented the city on its ability to keep theequipment going.

“You’ve done a real good job keeping this stuff together,”Grubbs said. “But there comes a time when you need to replace thisequipment.”

Grubbs said the city does not need to use bond issues forequipment purchases. He suggested a lease-purchase plan to spreadout costs over several years.

The city also needs money to replace and upgrade its old lines.Current rates are not providing the revenue needed to do that.

“You’re basically just providing services and trying to catchup,” said Grubbs, who also talked about “astronomical” costs ofmore recent requirements covering water treatment, testing andsanitation.

Grubbs also cited a need for removal of sludge, which hasn’tbeen in 15 years, from the city’s water and sewer system.Massengill said he will recommend $75,000 be included in nextyear’s budget for that purpose.

Regarding overall revenue, Grubbs said only $163,000 of morethan $2.6 million in funds on hand is available for line upgrades,equipment needs or other emergencies. He said he recommendscommunities having a 30 percent set aside for those needs.

In addition to rate increases, Grubbs included a recommendationto double the residential water and sewer line tap fees from $200to $400. Those fees also have not been raised in a number ofyears.

“I’ve been here 15 years and the tapping fees have been the samefor those 15 years,” said Water Department SuperintendentDickey.

Currently, Massengill said it is costing the city around $500for a water and sewer tap. He said the city should move to at leasttry an offset those costs.

“It’s costing you money to put in a residential tap,” saidGrubbs, adding that the tap fee increase would have least impact onhomeowner since it is own factored into their mortgage.

Grubbs said his revenue projections do not include the increaseexpected from tapping fees.

“We got an unknown number and we know it’s positive,” Grubbssaid.

The poor condition of the city’s sewer lines adds toinfiltration and inflow problems during heavy rains, Massengillsaid. By allowing the rain to enter the lines, the waste watertreatment plant’s three million capacity is “significantly”exceeded during those times.

“We’ve got to get that under control,” Massengill said.

Massengill said the water and sewer issues are critical to thecity and its future. He said all officials wish they would neverhave to raise rates and no one wants to do it.

“(But) If we’re going to be responsible, we’re going to have todo it,” Massengill said.

Ward Four Alderwoman Shirley Estes agreed.

“I can’t imagine our being more irresponsible if we’re going tocontinue in the mode we’re going in,” Estes said.

Aldermen did not act on the consultant’s recommendations lastnight since they were not in a formal meeting. Action could comebefore the start of the new fiscal year Oct. 1.

Grubbs was optimistic the water and sewer rate recommendationswould address the city’s issues.

“If we can stay with this program, your water and sewerdepartment will be in pretty good shape in three to four years,”Grubbs said.