The proposed 2009-2010 budget for the City of Smithville includes an overall increase in water and sewer rates of 37%.
Some aldermen believe that is too much.
The mayor and aldermen held a workshop Wednesday night to discuss the budget with the city's financial consultant Janice Plemmons Jackson.
Ms. Jackson says the city has not raised it's water and sewer rates in several years and revenues haven't kept up with increasing costs.
And while the city ended the 2007-08 fiscal year in the black by $330,384 in the water and sewer department, this year the city could be at a break even point or in the red. The actual net income or loss for the year apparently won't be known until after June 30th.
Jackson says the proposed 37% rate increase would help the city catch up "In looking at 2008-09 revenues, the revenues are actually going to be a little bit lower this year than they were last year. It looks like usage is down. You have not increased your water rates since 1999. You've not had an increase in any water rates in eleven years. Sewer rates have not changed during that same period except in 2005, they did go up like 30 cents per thousand for the usage above a thousand gallons. In a comparison between 1999 and 2009 in a span of that ten year differential, you see that your income or your revenues in water and sewer have gone up in round numbers by 28%. It went from $1,382,922 to $1,766,315. But then you look at the comparison of costs in that ten year span and you can see that all of the different categories have averaged an almost 77% increase from where they were ten years ago, yet your revenues have gone up 28%. So you see how the shortfall has come to play. Basically to keep you at break even or just pretty close to that, I feel like these increases need to be put in what we have worked into the budget."
Jackson says if the water and sewer fund operates in the red for two years in a row, the state could force the city to raise rates to make the utility self supporting.
Aldermen Tonya Sullivan and Cecil Burger indicated they might support a smaller or gradual increase but Sullivan said she felt a 37% increase was too much, especially since the city doesn't know for certain if the water and sewer fund will actually be in the red this year. "I think we almost feel like it's price gouging at this point even though maybe we should have been going up over a period of time. We know there has to be some increase. I think half of that increase would be easier to stand in increments than it would be to hit all at once. With economic times, jobs could change, people might could withstand a little bit more the following year. I'm a little disappointed that over a period of time we haven't gone up gradually so that we're not hit as hard. So I would be more in favor of a gradual, a slight increase versus a drastic increase. That's just my opinion. "
Alderman Steve White said he is concerned that if the city doesn't address the issue now, it will have to be revisited again next year. "Although it's a hard decision and nobody ever wants a higher bill, when we know we're barely breaking even, I think we need to catch up. There's no need in trying to catch up over the next few years, especially if we know and are being told that all of our expenses are going to keep rising. It's just putting it off for another time."
Since it was only a workshop, the aldermen could not vote Wednesday night, but indicated they wanted Jackson to figure the proposed overall rate increase at about 18% so they could make a cost comparison.
The cost comparison from 1999 to 2009 in the water and sewer department is as follows:
Personnel Service: $349,488 (1999), $548,922 (projected 2009) 57% increase
Chemicals and Supplies: $66,331 (1999), $143,500 (projected 2009) 116 % increase
Utilities: $171,788 (1999), $415,000 (projected 2009) 141% increase
Repairs & Maintenance: $69,815 (1999) $166,000 (projected 2009) 137% increase
Insurance: $43,214 (1999) $117,000 (projected 2009) 170% increase
Other Overhead Expenses: $62,166 (1999) $201,779 (projected 2009) 224% increase
Employees Benefits: $57,379 (1999) $134,058 (projected 2009) 133% increase
Total Operating Expenses: $1,191,102 (1999) $2,106,259 (projected 2009) 76.8% increase.
Meanwhile, Fire Chief Charlie Parker made another appeal for more funding for his department, but was told that the big ticket items he was making a request for would not be funded this year, including a full time or combination department, or a ladder truck.
Parker asked that funds be budgeted to pay the firefighters a minimum wage for their time spent training and the extra work they must do to maintain the current ISO rating; that the firefighters rate of pay per call be increased from fifteen dollars to twenty dollars if it does not affect the department's equipment budgets; that more money be included for repairs and maintenance because both fire engines are in need of some repairs and diagnostic work; that each firefighter have a uniform allowance; that more money be allocated for supplies and vehicle operations; that half the cost of a new ladder truck be set aside in the budget; and that funds be budgeted to purchase a vehicle for the department possibly from state surplus to transport equipment, so that the firefighters don't have to use their personal vehicles.
Mayor Taft Hendrixson said if the aldermen were to approve Parker's request, then a large property tax increase would be needed to fund it. Alderman Sullivan explained to Parker that the full time department and ladder truck were not included in the proposed budget, but that the spending plan for the fire department is being increased from $91,000 last year to $112,500 in the new budget, including an additional $5,000 in payments to firefighters for the year based on their calls.
The proposed 2009-2010 budget for the fire department compared to 2008-09 budget is as follows:
Junior Firefighter Program: $2,500 (2009), $2,000 (2010)
Payments to Volunteers: $35,000 (2009), $40,000 (2010)
Payroll Taxes: $3,500 (2009) $4,000 (2010)
Telephone: $3,000 (2009), $3,500 (2010)
Repairs & Maintenance $2,000 (2009), $3,500 (2010)
Miscellaneous: $1,500 (2009), $2,000 (2010)
Supplies: $12,000 (2009), $15,000 (2010)
Vehicle Operations: $4,000 (2009), $6,000 (2010)
Insurance: $15,000 (2009), $18,500 (2010)
Utilities: $2,500 (2009), $3,000 (2010)
Capital Outlay: $10,000 (2009), $15,000 (2010)
Meanwhile, the aldermen are considering giving city employees a one or two percent increase in the form of a one time bonus this year, since the proposed budget includes no cost of living raise.
All aldermen were present for the meeting except Jerry Hutchins, Sr. who had to be absent due to his wife's illness.
The mayor and aldermen will meet Monday night, June 15th at 7:00 p.m. at city hall possibly to consider passage of the new budget on first reading. WJLE plans LIVE coverage.