Roosevelt city water users may be paying higher water rates beginning in July.
City leaders say based on annual audit reports, bonding requirements and projected plant replacement costs, they have no choice but to consider a possible increase in water rates.Roosevelt City Council members discussed the dilemma recently while reviewing different rate proposals. In one scenario, the base water rate would go from $12 to $15 a month, and usage above 8,000 gallons would jump from 95 cents for each additional 1,000 gallons to $1.19, for a 25 percent increase. At the same time, however, the monthly sewer charge would drop from $12 to $9 or $10.
Another proposal would raise the base water rate by approximately $15 and at the same time would allow 12,000 gallons of water rather than the current 8,000 gallons before the overage charge would kick in.
Recent audit reports found the city in non-compliance with bonding requirements, which stipulate the water fund must generate enough revenue to run in the black. The city currently subsidizes the water fund with revenue generated through the sewer fund, City Administrator Brad Hancock said.
"The bond document requires the water fund to pay for itself. We've always considered water and sewer funds together. But the bond specifies they must be made separately in order to be in compliance."
In addition, City Council members would like to establish a sinking fund to pay for future replacement costs and possible upgrading of the culinary water system.
"Under plant replacements, estimates show water rates have to move to $15 to be in the black. We need actual cash, which would be set aside to replace the lines, tanks, wells and other plant facilities when the time comes. A sinking fund is generally an accepted governmental accounting procedure," Hancock said.
Increases in water rates would also make those with water connections outside of the Roosevelt city limits pay their fair share of the costs.
"In-city water users are subsidizing out-of-city users because the sewer fund revenue is being funneled into the water fund to make up the deficit," he said. Those with the "outside water connections" are usually on septic tanks and therefore do not pay monthly sewer charges.
City Council members say they'll study how the possible increases will impact all water users, particularly heavy users such as businesses, before making any decisions.
"It's got to be equitable among everyone," said Councilman Dennis Jenkins. "Let's run the figures and see how it will affect the motels, car washes, trailer courts, hospital, laundromats, all of the high water users."
The last water rate increase for Roosevelt city water users was approximately 10 years ago.