Fairhope, Alabama
Edited.
New water rates |
New sewer rates. |
WATER AND SEWER
The city council gave its final approval to a water and sewer rate hike, per a consultant's earlier recommendations.
Councilman Burrell said the rates here are traditionally not adjusted yearly and this should "catch us up" with expenses -- "to keep from falling further behind."
Councilman Martin agreed but observed they still would not be 100% of expenses (only 93%).
Mayor Sullivan referenced the cost-of-service-study just completed: "We were only recovering 65% (of costs) ... this will catch us up over a two year period."
Additional service growth (new customers) is hoped to make up the remaining 7%.
The increases are to go into effect on January 1, 2025 and 2026 -- after being appropriately advertised.
From a previous Fairhope Times report:
"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.
Marshall added that the data/recommendations are typical of an expanding system, such as Fairhope's."
Comments
Labor cost adjustment (LCA) factor. The base rates set forth above may be adjusted periodically to account for permanent changes in labor-related revenue requirements (e.g., salaries and wages, pensions, and benefits, etc.) that come about as a result of budget actions taken by the city council for a fiscal year. Such adjustment, when approved by the city council, shall be calculated as follows:
LCA = 1 + ((TLCB - TLCBR)/BRRR)
Where:
TLCB = The total annual labor cost, in dollars, that is reflected in the electric utility budget for the coming fiscal year, as approved by the city council.
TLCBR = The total annual labor cost, in dollars, that is reflected in the current base electric rates.
BRRR = The total estimated revenue requirement, in dollars, that is being recovered in current base rates.
The LCA factor so calculated shall be applied to each retail rate set forth above, excluding schedule FCA, such that it will result in new base electric rates. Thus, when applied, a new TLCBR and BRRR will be established for future LCA calculations. The following accounts shall be used in the determination of total labor costs as reflected in TLCB and TLCBR:
Collection costs/revenue department
Administrative costs
Salaries
Payroll taxes
Retirement expense
Medical insurance
Casualty/workers compensation insurance