By Tim Cox
Members of Celina City Council's utilities committee plan to recommend drastic changes to a proposed ordinance to increase water rates.
Under terms of an amendment hashed out by committee members Monday, water rates would rise 10 percent beginning Oct. 1 and another 10 percent April 1, 2007. Three percent annual inflationary increases would begin in 2008.
City administration officials had sought an immediate 15 percent increase in water rates and an additional 15 percent bump in 2008, with 3 percent annual increases beginning Jan. 1, 2007.
The administration's proposal would have raised rates by more than 52 percent over five years. The revised ordinance would hike rates by 40 percent over six years.
Despite the downward revision, city residents and rural water customers almost certainly will see further rate increases. A formal study will be done early next year to determine the city's exact costs of treating water, including the cost to build new treatment facilities that are planned. Councilman Rick Bachelor pushed strongly for changes to the water rate ordinance. The city should hold off raising rates any more than necessary until the study is done and city officials have firm numbers to justify their plans, he said.
Bachelor proposed gutting the existing ordinance, replacing the 15 percent increases with 10 percent spikes and leaving the inflationary increases out until rates are revisited next year.
"I think this would be doing a grave disservice to the people we represent," Bachelor said of the original proposal.
The second 15 percent increase proposed by the administration was based on the estimated costs to run the granular activated carbon (GAC) treatment system city officials plan to have built by the end of next year. Those costs are estimated at $330,000 annually, and construction of the building and purchase of the new equipment would have to be paid through further water rate increases.
"We're speculating big-time here. I don't want to speculate big-time," Bachelor said.
Other council members agreed to go with Bachelor's recommendation for two 10 percent increases because it is enough to offset existing operational budget shortfalls in the water department.
Bachelor's proposal would actually bring in more money over the short-term, raising rates 21 percent by April 1, 2007. The administration's plan would have boosted rates by 18.5 percent during that same span.
Other council members refused, though, to go along with Bachelor's plan to drop the inflationary increases from the ordinance. Annual adjustments have been discussed for years to ease large one-time spikes in water rates, but never implemented, they said.
"We know the department costs are going to go up every year," Councilwoman Angie King said, joining others who want the inflationary increases kept as part of the water rate plan.
Bachelor said he supports them, too, but suggested the rate be examined during the next round of water talks next year.
Councilors agreed to compromise, leaving the 3 percent annual adjustments in the proposed ordinance, but delaying them until Jan. 1, 2008.
The ordinance will go before the full council for second reading at Monday's regular meeting.
Mayor Sharon LaRue said she likes the switch from an increase that would have taken effect Jan. 1, 2007.
"January is the hardest month for people to pay their bills," LaRue said.