MUNROE FALLS — City officials are looking at increasing water rates for the first time in 19 years following a recommendation made by an organization hired to assess the current utility charges.
“You’re behind and now you’re trying to play catch-up,” said Nathan Davis, senior rural development specialist for the Ohio Rural Community Assistance Partnership (RCAP), when he spoke to City Council on Tuesday night.
Mayor James Armstrong said the city hired RCAP to do the water rate study in response to a recommendation from the Ohio EPA.
The city currently bills its water customers on a quarterly basis and issues bills at different rates for residential, apartment and commercial accounts, but RCAP is recommending that the city bill on a monthly basis and have the same rates for each customer category. The city has not raised its water rates since 1999.
The current minimum monthly charge for residential customers is $11.46 for residents using 2,000 gallons or less, $11.66 per month for apartment customers using 2,000 gallons or less, and $23.24 a month for commercial customers using 4,000 gallons or less; RCAP is encouraging the city to increase the minimum monthly rate to $15 a month for customers using 2,000 gallons or less, and then an additional $7.35 for every 1,000 gallons that the customer uses beyond 2,000 gallons. RCAP is proposing that this increase happen as soon as possible and that incremental increases for both the minimum charge and the usage charge occur annually through 2023, when the minimum monthly charge would be $23.50.
The study shows an example of a residential customer who uses 4,500 gallons per month now pays $81.10 per quarter (or $27.03 per month), while an apartment customer using 4,500 gallons a month pays $29.18 per month and a commercial customer using 4,500 gallons each month pays $69.96 per quarter (or $23.32 each month).
Under the changes proposed by RCAP, every category of water customer who uses 4,500 gallons per month would pay $37.05 each month.
Davis noted “most” of the city’s water customers use less than 4,000 gallons a month.
Davis said the minimum charge is designed to cover fixed operating costs such as salaries, office supply expenses and insurance. The usage charge (which would be issued for any customer using more than 2,000 gallons) would pay for the variable costs such as electricity, fuel and maintenance. To arrive at the charges, Davis said he examined what the city spent on water-related expenses during the past three years and looked at this year’s budget, and then increased the charges in subsequent years based on an annual increase in the inflation rate of 3.5 percent.
In its evaluation, RCAP recommended that the city raise its water rate to generate revenue to partially fund annual loan payments in 2021 and fully pay for loans in 2022 once the Utility Improvement Capital no longer has a cash balance. The rate hike is also needed so the city can set aside money for performance monitoring (such as leak detection), preventative and predictive maintenance, capital improvement projects and emergency escrow, according to RCAP’s report.
RCAP is recommending that the city set aside 1 percent of the revenue it generates each year into an escrow account to use for a “true emergency,” said Davis.
As it analyzed the rates, RCAP also took into account the $4.8 million in water capital projects that are being recommended by the city’s hired engineer.
Council President John Hegnauer said the proposed increase is “hard to swallow.”
Davis has proposed increasing the minimum monthly charge from $11.46 to $15 as soon as possible and then raise that charge to $20 at the beginning of 2019. Councilwoman Jenny Markovich suggested that Council consider increasing the minimum charge to $20 this year rather than doing two separate increases approximately six months apart.
Armstrong said he will have Law Director Tom Kostoff put together legislation on the proposed increase and have Council give the issue a first reading on either April 17 or May 1. He said Council can plan to discuss the issue at three Council meetings and two committee meetings before taking action.
Reporter Phil Keren can be reached at 330-541-9421, email@example.com, or on Twitter at @keren_phil.