Ash Flat residents will see an increase in their monthly bills with the recent increase of water rates and a proposed sewer rate increase in the city.
The council unanimously agreed to raise the rates at a special council meeting May 10 to make the revenues meet the expenditures in the department.
The council reviewed the ordinances at the regular meeting May 17. The council unanimously adopted a water rate increase with an emergency clause. A public hearing will be held on the proposed sewer rate increases before the regular council meeting June 21.
The water rates were increased by 75 cents on the monthly base rate. The council voted to change the base rate from $4.85 to $5.60 with additional fees based on water usage. Those fees have also increased. The city will charge $1.50 for each 1,000 gallons after the first 1,000 and $1.25 for each 1,000 gallons thereafter.
The council has also proposed an ordinance that will increase the base rate of sewer service by $1 a month. The city currently charges a $12.50 monthly minimum for sewer service. Additional charges are based on the average reading taken from December, January, February and March. If the council approves the ordinance the first 1,000 gallons will be included in the base rate. Residents will then be charged $3 for each additional 1,000 gallons up to 4,000. Additional fees of $2 per 1,000 will be charged for each 1,000 gallons thereafter.
"It will cover the costs but not the loss," said Mayor Brien Nix Hall at the special meeting. "I hurt for the people, but I also hurt for the city if we don't do this."
The city's water and sewer rates were among the lowest in the area; however, the costs were not covered by income into the department, Hall said.
"For the last seven months I've been saying we've got to watch the budget, we've got to watch the budget," Hall said. "Our expenses are not being covered by our revenue in that department."
Water and Sewer superintendent Joe Bill Fowler said the rates are set by the department's debt. The primary debt for the water department was construction of the water tower. To construct and expand the sewer the city had to borrow money, thus increasing residents' rates to pay for the debt.
City auditor Jim Morris addressed the council about the financial woes in the water and sewer department. Morris said the city has spent $110,000 more than they have taken in with sewer revenues due to sewer expansion. The department has also overspent in the water fund.
Morris said the operating expenses in the water department had risen from $10,000 one year to $59,000 the next year because of repairs and maintenance to water lines.
Hall said the city has not been covering its costs in the department for the last seven to eight months.
Morris recommended that the council raise the rates.
"There needs to be something worked out so it's pretty much equal," Morris said.
At the April 19 meeting Hall said he had received a letter from USDA recommending that the council increase both the water and sewer rates. The increase would have raised the average water bill by $3.65 a month and the average sewer bill by $2 a month. The proposed increase would have generated an additional $2,500 a month for the Water and Sewer Department. At that time the council chose to table the issue for one month.
The city sewer rates have never been raised, Hall said. The water rates were raised several years ago, he said. With the improvements to the water system and expansion of the sewer, Hall said, an increase was inevitable.
"We're not covering our costs with the sewer," Hall said. "I want us to be proactive. I want us to cover the costs. Nothing else."Morris said the sewer fund is in worse shape financially than the water fund.
He recommended that the city raise the city rates based on the letter from USDA and add an additional dollar.
Alderman Jerrell Lesley said it makes sense to implement more of an increase on the sewer rates.
"We need to make sure we do the absolute least," Lesley said. "Those people on Social Security aren't getting any raises. Some of our people aren't going to pay their water bills because they can't afford it."
If the city didn't raise the rates FMHA, the loan holders for the department could take over the department and its staff. If that were to happen residents would have probably experienced even greater increases, Hall said.
To cover payroll for the department the council voted unanimously to cash in the only remaining CD for the department.