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August 27, 2009

City to Consider Water, Sewer Rate Increases at September Meeting

With the specter of a fourth straight year in the red facing the Memphis City Water and Sewer Department, the board of aldermen is considering a rate increase for both services.

The issue was the focus of a board workshop held on August 13th and also was a topic of discussion as a special budget meeting held August 20th.

Under the proposal, the minimum use allotment would be eliminated from the billing system. Previously, customers paid a $19 access fee, which included the first 1,000 gallons.

The new rate will maintain the user fee at $19, but will bill customers for all usage. The cost per 1,000 gallons of water would increase from $5.06 to $6.50.

The proposed ordinance also would implement a 10% price increase annually over the next three years, raising the price to $7.15 per 1,000 gallons in 2010, followed by increases to $7.90 in 2011 and $8.70 in 2012. The access fee will also rise 10% during each of those years to $20.90, $23.00 and $25.30.

Currently the city has nearly exhausted its water and sewer reserves, and with anticipated annual repair and replacement budgets in excess of $100,000, the council agreed it must not only bring the departments out of the red, but must start to rebuild the reserve funds for future upgrades.

The sewer charges will undergo a similar price hike.

The access fee will remain at $5, with the cost of sewer service rising from $1.82 to $2.00 per 1,000 gallons. That cost will go to $2.10 per thousand gallons in 2010, followed by increases to $2.45 and $2.70 in 2011 and 2012. The access fee will go to $5.50, $6.05, and $6.70 from 2010-2012.

Under the proposed rate hike, the average customer who uses 5,000 gallons of water per month will see their bill increase from $51.52 to $66.50, an increase of $14.98 per month.

The annual 10% price adjustment is being considered after reviewing past budget years and identifying expense growth of more than 13% annually as related to rising costs of materials, chemicals and payroll.

The city water plant is manned 24/7. Combined with the sewer, water distribution and office employees, the water department payroll and related costs are $400,000 annually.

The remainder of the 3/4 million dollar budget is earmarked for water and sewer lines, lagoon maintenance and upkeep.

The economic model for the rate hike projects the city will be able to budget roughly $100,000 annually for repairs and renovations. Future projects mandated by DNR regulations of the city lagoon include replacement of the lagoon curtains and replacement or rehabilitation of the lagoon pumps. Other projects include rehabilitation of manholes and access points to further reduce storm water inflow into the sewer system as required by DNR regulations.

The council will review the proposed ordinance at the September 3rd regular meeting.


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Memphis Democrat
121 South Main Street
Memphis MO 63555
Phone: 660-465-7016 -- Email: memdemocrat@nemr.net