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City may lighten load on utility bills
City may lighten load on utility bills
By JOSEPH KOZIOL JR.
Chardon City Council is investigating a one-time credit for residents to use toward their water and sewer bills in an effort to provide some relief due to the economy.
Council agreed Monday to have its finance and water and sewer committees look at the possibility of offering either a $50 or $75 discount for the coming year.
Council President Philip King said the "substantial decline" in the economy over the last two years has left many residents struggling, some with job layoffs and home foreclosures.
He said the city has been working over the past year to reduce costs at its water and sewer operations, which makes the discounts possible.
Mr. King said he hopes the committees would review the issue and possibly return with a recommendation by council's May meeting so that the discounts could be possible by June 1 or July 1.
Chardon Finance Director Jeff Smock provided council with a breakdown, based on January billings, of the impact of those discounts.
He said the $50 discount would provide approximately 45.8 percent of residential customers with more than a full month of credit. The largest group of about 190 customers, those using up to 1,000 gallons of water, would essentially be credited with two free months with the credit.
The city would lose approximately $85,450 in collections with the $50 discount, Mr. Smock said.
Providing the $75 discount would provide 74.5 percent of customers with more than a full month credit, he said. It would cost the city about $128,175 in collections.
Mr. King said the city would not be spending money for the program, just not taking in as much. He said the program would only affect the carryovers in water and sewer accounts.
Mr. Smock said it would affect the fund balances in both accounts, "but not at a level that is catastrophic."
Mr. King said the city looked at providing relief through the municipal income tax, but, with an anticipated shortfall of approximately $400,000 in collections, that would not be plausible.
Councilwoman Deborah Reiter said she's concerned that giving the discounts now would result in the city having to raise rates later to make up for the dwindling account balances.
Councilwoman Leslie Bednar said the discounts will not impact water and sewer rates and would offer residents relief at a time when they need it. She said water and sewer rates may have to be raised in the future, but the discounts will have no impact on that.
Mr. King said the city raised rates two years ago, and officials promised at that time that they would not be raised again for five years.
Councilman John Mallen said he found that difficult to grasp. "It couldn't do it any good, that's for sure," he said.
Mr. King said, at some point, the city will have to increase the rates again just because of inflation and operating costs. But he said the discounts would be "manageable" and should have no impact on future rates. "This is not something we'll turn around and recover," he said.
Mr. Mallen said the discounts would likely require the city to raise the rates sooner rather than later.
Mr. Smock said the city will have to begin incrementally raising rates to cover the increasing costs. But they will not be as great as the 20 percent to 30 percent increases that were enacted two years ago, he said. Those rates hikes were needed to qualify for a loan from the Ohio Environmental Protection Agency for an new water-treatment plant.
Mrs. Bednar said the city's operations are not self-sufficient and already are being supplemented from the general fund. "This is a thank you to our residents," she said.
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