By Tim Cox
Water rates will rise 21 percent in Celina over the next six months after Celina City Council members finalized their plans for an increase at Monday's meeting.
A second phase of increases is expected after a formal cost study and when construction estimates come in for planned improvements to the water system. The next round of increases is expected in the spring.
Water rates will rise 10 percent Oct. 1 and 10 percent again April, 1, 2007, a total increase of 21 percent. The ordinance also calls for 3 percent annual inflationary increases to begin Jan. 1, 2008, and run for five years. Over the next six years, the ordinance -- which won unanimous support, would boost rates by more than 40 percent.
The increases also apply to rural water customers, who already pay a 10 percent surcharge to receive city water.
Council members approved the measure with little discussion. They moved quickly to adopt an amended version of the ordinance that was hashed out by utilities committee members last week. Council members then agreed to suspend the rules and pass the ordinance as an emergency so administration officials can have the increase in place by Oct. 1. The amendment scrapped an original proposal to implement an immediate 15 percent increase and another 15 percent increase Jan. 1, 2008, along with inflationary increases beginning next year. That proposal would have raised water prices more than 50 percent in five years.
City officials say the rate hike is necessary to offset budget shortfalls and to meet the costs of rising expenses for labor, treatment chemicals and to have money available for repair and maintenance of the water system. The water fund has a nearly $2 million annual budget but only a $62,000 cash reserve.
Further rate increases will be necessary next year to pay for granular activated carbon (GAC) treatment that is being added to the city's existing treatment process. The city is under EPA orders to bring its water into compliance with state regulations by November 2007.
The GAC is expected to lower the levels of trihalomethanes (THMs) in the water to acceptable levels. THMs form in the water when chlorine reacts with the organic material present in the water that is drawn from Grand Lake. The GAC will filter out the organic material so it cannot react with the chlorine that is added as a disinfectant before the water leaves the plant.
The current rate increase should provide enough money to cover the $330,000 in estimated annual operational expenses for the GAC equipment but does not provide money to pay for the addition. Officials plan to house the GAC system in a new facility to be built on the current site of the Blue Goose. The city's failed former power plant is to be torn down in the next few weeks.