Board eyes $4.4 million for projects
Aldermen have tentatively agreed on a plan to borrow about $4.4 million to fund expansion and renovation of selected portions of the city’s water and sewer lines, a move that would also bring higher water and sewer fees.
Aldermen attending a Tuesday work session seemed settled on a nonbinding consensus to borrow enough money to add water lines to Oak Hill Drive, Moreton Estates and Crooked Lane. They also agreed to add sewer lines to Moreton Estates and borrow enough money to rehab some of the worst parts of the existing lines.
A $4.4 million loan would require about $6 in increases on water and sewer rates.
Ward Four Alderman Shirley Estes and Ward One Alderman Dorsey Cameron were absent Tuesday, and the decision to borrow money can’t be voted on until the city’s next meeting on Aug. 7.
“I think the city is in a position to debt service this amount with fee increase,” said Ward Six Alderman David Phillips, throwing his support behind the project.
“This is the best time to borrow money,” Ward Five D.W. Maxwell said, citing low interest rates.
Under the current plans, 93 houses will be added to city water lines, but those city residents aren’t legally required to hook up to city lines. Aldermen discussed the need to offer incentives to encourage residents to hook up to the city lines. Otherwise the city will pay to lay water lines but won’t receive the additional revenue from new customers.
Sewer hookups are mandatory.
The total slated for borrowing also includes $500,000 for any additional small projects that may be deemed necessary.
Mike McKenzie, with WGK engineering, said the city doesn’t have to begin paying on any debt it takes on right away. That gives the board several options on dealing with rate increases. They could be phased in a dollar at a time over a several year period or implemented all at once, McKenzie said.
Right now, 65 percent of city residents on city water are paying the minimum bill, McKenzie said. He added that the city’s rates are running below the area average.
McKenzie repeated to aldermen the totals he’s given them are estimates, and he hopes they are a little too high.
“These numbers have a fair amount of contingency in them so I don’t have to come back and explain why we’re over budget,” McKenzie said.
Bumgarner supported the proposal but urged caution, reminding aldermen they’re not the one’s that will be paying for the project.
“It’s going to fall back on the rate payers,” Bumgarner said.
City Attorney Joe Fernald chimed in on that point, highlighting that the water and sewer funds are fee based and general funds cannot be used for those services.
“People think ‘I’ve been in the city five, 10 years paying taxes.’ I deserve city services,” Fernald said. “That has nothing to do with city utilities. It’s fee based.”
Bumgarner also reminded aldermen the city waste water treatment plant may need to be replaced in 2015 when it’s current license expires.
“I can almost guarantee you that’s going to be a 10 to 15 million project,” Bumgarner said.
Ward Two Alderman Terry Bates and Ward Three Alderman Mary Wilson didn’t object to the project proposal, but said they’d like to the city take action to help other areas of the city as well, including Brignall, Manson Street and Honeysuckle Drive.