Starkville aldermen will discuss today a proposed $3 million general obligation bond and a potential 5 percent water rate increase as ways to finance short- and long-term capital improvements.
The proposed bond issuance would cover a number of projects, ranging from drainage improvements to street overlays, and water rates could be adjusted to give the city additional financial leverage in upgrading its aging piping system.
While Tuesday’s agenda does not specifically call for a water rate increase, the city’s e-packet lists a 5-percent rate increase as at least a topic of discussion. Such an increase, the document states, would generate an additional $200,000 in revenue.
Other options to increase water revenues include increasing the minimum billing quantity to 2,000 gallons per month and collecting user fees from bulk metered multi-family developments, which are respectively projected to bring in an additional $125,000 and $200,000 per year.
Ward 5 Alderman Scott Maynard said the GO bond’s issuance would not necessitate a tax increase.
He also chairs the Starkville Budget and Audit Committee.
Starkville utilizes about $540,000 of discretionary spending toward capital improvements. If the city proceeds with the bond, annual payments of roughly $210,000 are expected toward debt service, he said.
The city could issue the bond and knock out a number of potential projects — the 2015-2016 paving schedule, Russell Street corridor redesign, Lampkin-Lafayette streetscape improvements and a Lynn Lane sidewalk, among others — while rotating its discretionary spending toward debt relief.
Prior debt obligations will roll off the books in 2020, freeing up monies to again supplement the capital improvement budget.
“This could be one of those pivotal meetings in Starkville’s history. We can do about $3 million worth of work in the next three years, which is almost double what we have planned,” Maynard said. “I also anticipate that asphalt is going to be cheaper with lower oil prices. We need to capitalize on that for the taxpayers of our city. It makes a lot of sense to get it done and do it now.”
Ward 3 Alderman David Little said the infusion of funds will provide residents the results they’ve demanded for years. During previous debates over the city’s insurance options, he alluded to fixing potholes and drainage issues — the meat and potatoes of local governance — as the reason he ran for alderman in the first place.
“We can do it within our budget. There might be some naysayers out there, but Scott and I are both pushing forward,” he said. “You’ve got drainage issues in Huntington Park. You have Sherwood Forest residents calling about roads. These folks have been told to come back in a couple of years, but a couple of years have come and gone.
“People are tired and want to see progress,” he added. “I think we have a good plan that will address several needs. This is the stuff you can see, the stuff that helps folks.”
Aging pipes worry aldermen
Starkville is at a point with its aging water infrastructure that if it doesn’t take a serious look at rate increases, Maynard said, the total cost of future improvements could become a burden on revenues.
The system’s age produces visual results: water browned by the oxidation of iron deposits lining the pipes. Since Starkville increased its water’s chlorine levels, as mandated by the government, reports of brown water throughout the city became a regular occurrence.
Workers routinely flush the system of the unsightly water by opening fire hydrant valves.
“We’re constantly getting complaints about the brown water. If it’s not addressed, it’s going to get worse,” Maynard said. “There are parts of the city where the piping — both water and sewage — have outlived their life expectancies. We need to put a program in place to systematically upgrade those and preferably do it by concentrating on the most critical areas first.”
The impact of a 5-percent increase is obvious; with the minimum billing quantity increase, Tuesday’s e-packet states second meters operating residential sprinkler system minimums would remain at the current minimum rate.
Every occupied dwelling with an active electric meter is required to pay a water and sewer user fee — $7.50 per month for both water and sewer usage and $4 per month for water only — regardless if any water is consumed; however, multi-family units that do not have individual water meters for each unit have one meter serving an entire complex or multiple buildings within the complex, the e-packet states.
“In these developments, the landlord absorbs the water and sewer expenses and includes them in the rent for each unit. Each of the units within the complex with an active electric meter is being assessed the solid waste user fee,” state the document within the water rate discussion item on the agenda. “If these units were assessed the $7.50 water/sewer fee, it would generate $200,000 per year. User fees ensure that users have capacity when and where they need it.”
Starkville has utilized rotating Miss. Capital Improvements (CAP) loans to tackle water issues, but Little said it is time to start generating additional revenues now before the city is forced to play catchup with massive hikes in the future.
“(Jackson, Hattiesburg and other cities scrambling to find additional revenues for water improvements) are being reactive. They waited too long. To me, it’s like a house. You should keep it up as you go so you don’t face a massively expensive project 10 years down the line,” he said. “How can you put a price on clean water? Who wants to go to the sink and get (brown water)? It’s unacceptable, and we have to address it now.”
Hints at a rate adjustment first materialized in October when SPW Director Doug Devlin predicted future increases.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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