Hawarden water, wastewater rates increase

Posted June 20, 2014 at 10:39 pm

By Steve Peterson

Water and wastewater rates were discussed by Hawarden councilors at their regular meeting June 11 but no action was taken.

“Last July 1 we raised the water rates 10 percent but that did not do enough,” said Hawarden City Administrator Gary Tucker. “The study showed a need for higher rates than we raised them last year. We left the base charges for water and wastewater the same.”

“We can’t put it off,” said Councilor Tim Kurth, adding a 12 percent increase this year may be an option. “That is why we’re in this problem. We did not raise the rates before. You have to catch-up somehow.”

I & S Group Consultants of Des Moines prepared a study of the city’s water and wastewater rates. The study is the same as last year’s information.

Councilor Monte Harvey voiced objection to the “base rate,” which is a charge despite no use.

“Utilities can get away with charging someone $55 for the privilege of having electricity. I know of no other industry anywhere except utilities that gets to do that. That is not the case in retail. It’s the cost of doing business,” said Harvey. “Charge for what is being used. You’re giving a little old lady a $55 a month charge for the privilege of living in Hawarden. I am not going to go for the proposal that is in front of us now. If we do it for water, we will turn around and do it for electricity. I don’t understand why utilities should be allowed to bill you extra for the cost of doing business.”

“I agree. If you only use a little bit, then you should not have to pay a whole lot,” said Councilor Joel Fluit.

The rates will likely be an item for the 5:30 p.m., Wednesday, June 25 councilors’ meeting agenda. Three readings of an ordinance and approvals are necessary before any new rates can be on residents’ rates for Sept. 1 bills. However, after the first reading, the council can choose to waive the second and third readings and enact the price increase the same meeting.

Water Rates

The water rate hikes as proposed would generate $335,000 in revenue. The current rates are:

• Base charge, no water, $8.64 per month;

• First 2,000 CF per 100 CF $1.19;

• Second 2,000 CF per 100 CF, $1; and

• All over 4,000 CF per 100 CF, $0.93.

The rate applies to all classes: residential, commercial, industrial, interdepartmental, and public authority.

In 2009 the base rate was increased from $6.64 to $8.84. An adjustment was also made to the unit usage rates, and the current rate base is bringing in $285,500. But, costs are increasing, and it would have to be increased $70,000 per year, or 25 percent.

“For water rates, the proposed base rate would give $151,770 to the fund; the commodity charge, $204,002 for total revenue of $335,770, which leads to the proposed rates increases of:

• 200 CF (1,500 gallons), $11.02 to $13.90, an increase of $2.88;

• 500 CF (3,750 gallons), $14.59 to $18.25, $3.66 increase;

• 1,000 CF (7,500 gallons), $20.54 now, $25.50, $4.96 increase;

• 2,000 CF (14,960 gallons), $32.44 to $40, $7.56;

• 4,000 CF (29,920 gallons), $76.24, to $82, $5.76 increase;

• 10,000 CF (74,800 gallons), $203.44, to $246, $42.56 increase;

• 20,000 CF (149,600 gallons), $415.44, to $501, $85.56 increase; and

• 50,000 CF, 374,000 gallons, $1,051.44 to $1,266, $214.56 increase.

“Expenses have been projected on a 3 to 5 percent increase for many of the items with the same items projected to remain the same or increase slightly at the indicated rate. Utility costs are expected to rise uniformly over the period. Other utility costs are expected to remain the same or increase at the rate of inflation,” stated the report.

The current customer water usages are: residential, 59 percent; commercial, 22 percent; industrial, 13.8 percent; interdepartmental, 2 percent; and public authority, 3.49 percent.

“Both the water and sewer rates have been falling behind expenses in the Hawarden water and sewer departments prompting the city to initiate a review of the rates required to meet current and future expenses. Several small to medium size projects are anticipated in the near term which will require financing through the rate structure. The city will have to raise both water and wastewater rates to meet current and future budget levels; rates could be increased substantially or the city can consider raising rates over a three-year period,” reported the study.

Wastewater Rates

The proposed wastewater rates would bring in $417,917. Projected expenditure for Fiscal Year 2014-2015 is $406,493 and $411,354 for FY 2015-2016. Expenses are expected to rise 3 to 5 percent annually.

The sewer rates are:

• Base charge, $14;

• First 1,200 CF per 100 CF, $0.50;

• Next 2500 CF per 100 CF, $0.45;

• Next 7500 CF per 100 CF, $0.40; and

• All over 11,200 CF per 100 CF, $0.25.

For Wastewater Rates, there would be a base of $17.60 would generate $341,942 for residential; a $14 to $17.60 increase in base rate would generate $64,077; and for industrial, a $14 to $17.60 rate hike for the base would bring in $10,853, for a total from the base rate of $229,997 and commodity, $416,872.

User rates in another alternative would include $14 to $17 base, which would generate $336,972 for residential; $68,256 for interdepartmental and public authority; and $12,678 for industrial; bringing in $222,156 from the total base and $!95,750 for commodity.

Staff Reports

“Earlier we said the water tower would be painted. Unfortunately, there was a death in the company that was going to do it. Now it may be done in the Fall,” said Public Works Director Tom Kane. “We did not want to take that tank down, 750,000 gallons, if we need it for a fire.”

“The water levels in the city have improved a little bit. We’re keeping an eye on the water (in case the need for water restrictions is needed),” said Kane.

Regarding Treasurer and Finance Director Sherole Rens’s retirement, City Administrator Gary Tucker said now is a good time to plan for that. It will be discussed at the June 25 councilors’ meeting.

Hawarden Regional Healthcare

Expansion Project Update

“We had several staff members go to Kansas City to look at the interior furnishings for the expansion. Schoenfeldt Engineering is done with the site survey,” said Hawarden Regional Healthcare CEO Jayson Pullman in his update on the hospital’s expansion project. “Hoefer and Wysocki architects are working on the final design and development phase. Then we will go into the construction document phase, which will take about two months. On July 9 we will have a training for the fundraising chairpersons.”

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