Printable VersionThe estimated $78 million savings during the course of the sewer project has City Council members considering delaying a rate increase.
“We want to make sure we make every effort to have our citizens benefit from our savings as soon as possible. But there are several difficulties we’re being faced with,” Mayor Mark Nexsen said. “The biggest is that we really need a rate study to know if we are implementing the right amount (in April). … The problem is it can’t be accomplished by April.”
Nexsen said the problem limits the council’s options.
“So, do you just pick a number (for April) and assume you’re going to at least be in the ballpark? Nexsen said. “Or do you say, because all the bids are going to be in by the end of May, do you wait a full year before adjusting rates?”
Nexsen said he would like to implement a rate study soon, but it might not be a possibility.
“Rate studies are generally done by professionals and I would like to see someone in-house do it but with all of the budget cuts we’re experiencing I don’t think we have the capacity to do it,” he said. “Also, why would we want to pay someone $50,000 (professionally) if we can get the study done for $25,000 (in-house)?”
City Finance Director Gayle Whittle said an additional issue arises if the council chooses to adopt a lesser rate increase for April, then there is always a chance another update report could project a higher cost and future rate increases would have to rise higher.
“In (fiscal year) 2005-06, we had a 23 percent rate increase and in (FY) 2006-07, there was a 30 percent increase because from 2002 we hadn’t had any,” she said. “We don’t want increases to ever have to rise like that again.”
Whittle said she recommends the council chooses the current estimated rate increase to avoid those possible larger rate increases in future years.
“The risk (in adopting a lesser rate increase) is that once the update is done, council may need to implement an increase larger than (the estimated) 11.8 percent for 2011,” Whittle wrote to the council. “We will also have a better idea as to final construction costs at the end of the fiscal year, so we will have much more accurate information later and can always adjust to a lesser rate increase at that time.”
Nexsen said keeping every option in mind, he also understands the hardship the sewer bills create during a difficult economic time.
“I’m paying these bills too and so are my friends and I know it’s difficult to ask people to pay more,” he said. “I think we should make every effort to adjust the rate downward based on the information we have. … My gut is telling me if we’re (estimating more than) $50 million (in savings), there’s probably an adjustment we can make soon.”
All options will require a public hearing and notice during the process, a notice of intent to hold a public meeting and a report on the increased fees, which have to be filed with the public at least 30 days before the hearing, according to council communication.
You can contact the reporter at nbruttell@havasunews.com
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