Fairhope, Alabama
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| James Marshall, CPA |
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| Revenue distribution. |
TO KEEP UP WITH GROWTH
During a presentation at the council's last work session, James Marshall of the Jackson Thornton accounting firm of Montgomery who was hired by the city council for a utility rate study said that city utilities as a whole are currently recovering only 82 cents on every dollar being spent (for capital improvements, debt service, operations/maintenance, transfers to general fund).
According to the study, the sewer department needs an $8 per-customer increase to its base monthly charge -- and another $3 per every thousand gallons used.
Similarly the study found the water department needed and additional $1.50/month increase to its basic monthly charge -- and a $2 per thousand-gallon-used volumetric hike as well (inside city limits) -- plus a 2-step $1 volumetric hike for outside city limits.
These increases would bring water and sewer services up to 90% of projected revenue needs for the next five years; the suggested increases could be implemented over a two-year time frame.
A rate recommendation for the gas department could not be provided at this time due to insufficient data, Marshall said (coming later); the electric department is actually fully-funded at present, no increase needed.
Marshall added that the data/recommendations are typical of an expanding system, such as Fairhope's.
NEW FEES ON DEVELOPERS COMING TOO?
As a supplement to the study, recommendations for new fees on developers for new project proposals to be connected to city utilities are also in the works (development assistance fees), he said. These could help boost utility revenue to the 100% level, fully funded.
The city council will have to vote to modify existing ordinances to enact the increases at an upcoming meeting. Exact details still to be worked out.
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| Projected revenue requirements. |
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| Current utility revenue at 82% |
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| Proposed sewer hike. |
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| Proposed water hike. |
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