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Water, sewer hikes inevitable, city say
(by Joseph Koziol Jr. - June 06, 2012)
Water, sewer hikes inevitable, city says
By JOSEPH KOZIOL JR.
Chardon City Council is continuing its deliberations in raising water and sewer rates for residents and businesses.
Council's water and sewer committee has wrapped up a month of meetings in which it looked at various scenarios for the rate increases to cover the cost of water and sewer operations. Although the operations are supposed to be self-sufficient, officials said, the city has been dipping into its general fund to cover the costs.
"We have enough scenarios to present to council," Councilman Mitch Hewitt said. "Now, I want to hear what my other colleagues on council think."
Council President Philip King said he would schedule work sessions for council to build a consensus on which option to put in place by September. The rates must be in effect by November in order for collections to begin at the first of next year.
The committee considered three final options for the rate hikes last week, all of which include, for the first time, greater rate increases for commercial and industrial businesses. Until this time, businesses have been charged the same rate as residents.
The rate hikes are designed on a sliding scale over nine years with the largest increases in initial years.
"It's going to be rough in 2013, 2014 and 2015," Mr. Hewitt said.
One proposal increases residential rates 9.4 percent in 2013, 8.6 percent in 2014 and 4.3 percent in 2015. That is followed by six years with increases ranging from 3 percent to 3.5 percent. A second proposal raises rates 7.2 percent and 7.4 percent in the first two years and 4.4 percent in the third year, followed by an average of 3 percent to 3.5 percent increases in the succeeding years. A third scenario starts with 5.2 percent, 5.4 percent and 5.9 percent increases followed by rate increases averaging 3.4 percent to 4.5 percent.
The average residential user consumes about 4,400 gallons a month and now pays about $69.19. With a 9.4 percent increase, they would see bills rise by about $6.49 a month, or $77.88 for the year.
Rates for businesses would be higher, starting with about 23.5 percent increases in the first year under one proposal. Other proposals show initial year increases of about 21 percent or 18.5 percent.
Officials have been seeking a way to eliminate the siphoning of monies from the general fund but have said that would be too burdensome for homeowners and businesses. Instead, the proposals would reduce the transfers from the general fund over a nine-year period.
"There's no way, realistically, we can alleviate the subsidy from the general fund," Mr. King said. "The only way is over nine years."
He estimated that the city will draw about $4 million from the general fund over those nine years.
While still painful for water and sewer users, Mr. King said, without the rate increases, they would be hit with higher ones later to dig out the city's budget. "We wouldn't have a chance of catching up without hitting people hard," he said.
Mr. Hewitt pointed out that much of the debt for the two systems is the result of unfunded mandates, such as the water treatment plant that was required because arsenic levels that were slightly above federal standards.
Councilwoman Deborah Reiter said some of the pain could have been avoided if past councils had implemented regular nominal increases. Instead, rates were unchanged for years, she said.
Councilman John Mallen agreed, saying, "The city fathers have not been kind to residents in the past.
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