Posted: Thursday, August 14th 2014 at 1:24pm
Gainesville Council to H20 Dpt: How low can you go?
By Marc Eggers Staff
GAINESVILLE – When Public Utilities Director Kelly Randall and Finance and Administration Division Manager Tina Wetherford sat down before the Gainesville City Council at Thursday morning’s work session, they were about to propose an historic low increase in water and sewer rates.
The smile on their faces evidenced that they thought the news they came bearing would be well received.
“On the sanitary sewer we’re recommending that you leave the rate exactly where it is today; zero percent rate increase,” Randall told Council. “I’ve been here for more than a few years and I’m not sure we’ve ever done that.”
“On the water system…we’re recommending to you all to have a one percent rate increase on water,” Randall then added.
However, forty-five minutes later, as they arose from their chairs, they were looking at a challenge made by a couple of Council members to see if they could go even lower, as in “zero percent”, for their recommended increase.
Randall had begun his presentation by explaining that the city has been able to provide a high quality of service despite relatively flat increases in revenues.
Randall said in spite of the sluggish economy, “Moody’s increased our revenue bonds from A1 to AA2, a rare two step upgrade. That sort of thing is exactly what continues to save our customers money because our borrowing costs are down.”
Randall also pointed to the Gainesville Fire Department’s recent upgrade in ISO rating, and potential for lower homeowner insurance costs, something that couldn’t happen without a dependable water supply being available.
Randall and Wetherford were presenting a resolution for the Utility Department’s five year growth plan. Looking into the future can be daunting, especially when trying to project budget costs.
After extensive study, their department predicted that over the next five years there would be a need for just over $89.5 million of additional revenue to construct facilities so as to maintain, and potentially grow, the city’s water and wastewater system.
The question was now, how best to generate the revenue for those expected capital improvements.
Randall said a one percent increase in rates would start the process of generating those funds gradually. He said he wanted to avoid a much larger increase at a future date.
Mayor Danny Dunagan said, “I’ve been here for…eight years now, and I’ve seen an increase of 2.5, 3.5, four percent every year since then, but as I’ve preached to you for eight years, I want one year when you come in here…and say ’No increase at all!’.”
“I think just tighten your belt just a little bit more, and let’s do a zero-percent increase,” Dunagan added.
Councilman Sam Couvillon agreed. “I’m will not support any increase. On the one-percent, I’m against it.”
Couvillon said that often the conservative estimates made about future costs never materialize. “There’s no guarantee that in three years we’re going to have to raise it six percent.”
Taking the other side of the discussion of when to raise rates to provide the funding needs expected were Council members George Wangemann, Ruth Bruner and Myrtle Figueras.
“I would rather see a small (increase) every year,” Bruner said. “For us, just for the sake of saying we’re going to do no increase, to ignore the compounding effects, just to say we did it, I think that sends the wrong message.”
Randall said, depending upon usage, a one percent increase would raise the average residential water bill from four to thirty cents each month for customers within the Gainesville city limits and eight to sixty cents for customers outside the City.
The Council invites input from concerned customers. The first reading of the measure - which includes the one percent increase - will happen Tuesday evening at the City Council’s regular meeting. The meeting is open to the public and is held at the Gainesville Public Safety Complex on Queen City Parkway beginning at 5:30 PM.
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