A water rate increase may be in the cards for Columbus Light and Water customers.
Utility board members on Thursday voted down a recommendation from CL&W General Manager Todd Gale to increase water and sewer service expenses by 7.5 percent for the next fiscal year. An average water bill is $30, Gale said. His proposed increase would mean an additional $2 a month to that amount.
The board will meet next week to decide how to balance a budget that, as proposed, withdraws $938,075 out of reserves to pay for expenses and capital improvements. The board will be faced with raising rates or cutting capital improvement expenses. The latter option would kick the can down the road on infrastructure that has long needed to be upgraded, Gale said.
“We have to be frugal because it’s not our money and it’s the customers’ money,” Gale said, “but we’re here to provide a service and that means not letting stuff fall down around us.”
Board members Jimmy Graham and Charlie Newell voted in favor of Gale’s recommendation, which aside from the 7.5 percent increase next year, would have also include a 2.5 percent increase for the next five years. Board members Brandy Gardner and Micheal Tate were opposed. Board President Andrew Colom broke the tie against the rate increase.
The matter was ultimately tabled. A budget for CL&W’s water and sewer department has to be in place by Oct. 1, necessitating a special meeting next week.
Gale said as proposed, the rate increase would not have applied to the $13 minimum bill that a quarter to a third of CL&W’s customers pay each month. The increase would affect the unit price, Gale said.
He said a minimum bill currently gets a customer four units, or 2,992 gallons, of water. If a minimum bill were only to cover 3.5 units, that would be 2,618 gallons.
Gale said the average water bill is about $30, meaning a 7.5 percent increase would have amounted to an extra $2 a month on top of that amount, plus an extra $2 for sanitary sewer service.
The proposed budget projects $10,110,000 in revenue and $9,183,000 in expenses for general services, which is a net income of $927,000. CL&W is also taking on the first year of a five-year capital improvement plan, however. The first year’s capital improvement slate projects $1,212,000 in expenditures, the majority of which would go toward maintenance of the north and south water treatment plants, water main upgrades in East Columbus and sewer system rehabilitation projects in Southside.
The net income added to depreciation and amortization gives a $3,338,646 source of funds, but capital improvements added to debt and loans CL&W is obligated to pay adds up to $4,276,721. The shortfall would be covered by reserves. Gale said on the water side, the department has about $1.5 million in reserves.
Graham noted that about 10 years ago, the department had no reserve, which meant rates had to go up after a long time of them staying the same. An increase now is needed to avoid history repeating itself, he said.
“This water department turned around because we had to,” Graham said. “We didn’t have a choice. We were sissies about it until we got down to we weren’t going to be able to provide the service if we didn’t (raise rates).”
Colom added that an increase would help temporarily but that the board had a duty to explore additional options.
Gardner said the board needed to come to a consensus that would prevent a repeat of the same discussion next September.
“I don’t want to have to dip into reserves this time and come back and be back with this same discussion next year, but I don’t want people to have that large amount of increase over that amount of time,” Gardner said.
In other business, the board threw out two bids for sandblasting and painting the water tank on River Hill. An engineer estimate just for painting the 2-million gallon tower was $350,000, but the lowest bid, which included sandblasting, was more than $800,000. This was the second time the project was bid out, Gale said.
Gale said the board would consider alternatives, including not sandblasting the tower and just painting it. Doing so would not be a long-term fix, he said.
“It’s an eyesore,” Gale said. “We’ve got to do it, but it’s not a priority at this point.”
Nathan Gregory covers city and county government for The Dispatch.