Thursday, August 18, 2005

City ups water, sewer rates

Staff Writer

After months of deliberation, the Holly Springs Board of Aldermen voted 4-1 to pass a new water and sewer rate increase. It will likely take effect beginning October 1, at the beginning of the new fiscal year budget.

The board postponed action on new gas and electricity rate requests from Holly Springs Utility Department (HSUD), saying it needs more clarity on how rates will be structured.

Alderman Garrie Colhoun cast the opposing vote against the rate increases, saying he preferred a gradual rate increase each year rather than all at once. He said some households with limited income could have trouble managing the increase. HSUD would have problems collecting and would write off a lot of delinquent bills, Colhoun argued.

The board raised the rates for one year, deciding to wait until next year to consider additional rate adjustments HSUD requested that would incrementally add another 15 percent increase over a five-year period.

The new water rate will increase the minimum bill by about $1.68 a month or from $6.55 to $8.23 per month. The average customer’s bill will go up about $4.05 per month or from $15.76 to $19.81. Commercial/Industrial customers will see the same rate increase in both water and sewer.

Sewer rates are tied to water usage and based on 70 percent of water metered. The minimum rate for sewer will increase from $3.84 to $6.01 a month, or $2.17.

A customer can estimate what their water and sewer bill will be in October by applying the percentage increases. A person who has a water bill of $100 can see the bill go up to $125 or about 25 percent. Sewer bills will increase by about 56.39 percent per month. A customer used to paying a $10 a month sewer bill would see their bill go up to $15.64.

Aldermen who voted for the water/sewer rate increase argued that water and sewer should pay for itself. Gas and electricity revenues have been carrying the revenue deficits at the water and sewer department, they said.

“If we were in the hole $53,000 for the 12-month totals on water,” Hutchens said. “With the increase, in 2006 we would be at net income of zero.”

The sewer department ran a revenue deficit last year of $128,000.

Hutchens said the rate increases would just get the income and expenses at the two departments to zero balance.

Water and sewer departments built in no capital expenditures into the Fiscal Year 2005-06 budget.

The board agreed to discuss gas and electricity rate requests this week at the mid-month meeting and recessed meeting Wednesday at 5:30 p.m.

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