City Council members approved an emergency water and sewer rate increase on Monday, April 22, that will affect all local utility customers.
With Olney still in Phase 4 of its water conservation plan, and all outdoor water use prohibited, the city is experiencing major budget shortfalls since water is its main revenue source.
“Based on the last two months of revenue under Stage 4 restrictions, it is projected we would lose $104,776 for the fiscal year in water,” City Administrator Danny Parker said.
Once the projected shortfall of $84,006 for sewer is added in, the city stands to lose a total of $188,782 this year from its bottom line.
“It would take quite a hike to make up that difference,” Parker said, noting the increase to recoup that amount would be well over $20 per customer.
Council member Marshall Leemann said that would not be fair to any consumers, and the others agreed.
“At the end of the day, $188,000 is a big chunk of our reserves,” Jake Bailey said. “It’s painful, but would be more painful if we had to shut the plant down because we can’t afford to operate it, or having to have a bond election to operate and paying for it in taxes.”
Wanda Stroud asked how long any increase would be in effect, and was told by Parker that the council could go in and take the increases away once enough rain was received to get the city out of Phase 4.
During discussion over how much of an additional base rate charge to add for both water and sewer service, council members agreed that other portions of the increase should reflect usage.
“The lower tiers should have a minimal increase so as not to burden those people who aren’t using as much to begin with,” Leemann said.
He also recommended a flat increase for rural customers, rather than the customary 1.5 times the regular charge that has been historically observed.
Phil Jeske II made a motion to raise the base water rate for all commercial and residential customers by $5, from $17.50 to $22.50. He also proposed a $2 per month increase for those who use between 10,000 and 30,000 gallons, and a $3 per month increase for those who use more than 30,000 gallons per month. The motion also included a $5 increase in base rate for all sewer customers, as well as a $2 per month charge for sewer service use above 10,000 gallons. He also moved that rural customers have the same increases as those who live inside the city.
“Consumers will end up with an extra $10 per month,” Jeske said. “It’s a big increase, and I don’t like it, but you can’t turn the lights off, either.”
“I think $5 is too high,” Stroud said. “That base rate is going to affect everybody.”
Leemann gave the motion its second, and he, Bailey and Jeske voted in its favor. Stroud voted no, then changed her mind and abstained from making a decision. Mayor Brenda Stennett was present, but does not vote, and Samantha Purdy was not present.
Jeske clarified that the increase is emergency and temporary, only, but said it had to be done at this point.
“It’s over 15 percent of our annual budget, and we’re trying to make up for it,” Leemann said.
The increase will go into effect immediately, and will be reflected on bills customers receive in May.