Tuesday night, the council heard the auditor again say it needs to address the sewer deficit, now at at annual $5 million.
Auditor Francis Huffman said the city’s sewer user fee is not sufficient for the services the city provides. If not addressed, the drain in the sewer fund will continue, and the city will need to use money from its general fund to bear the cost of operating expenses.
The city plans to transfer money from its water fund to the sewer fund this year.
Doug Gardner with Pioneer Consulting Group was previously hired by the city to review water and sewer rates.
Currently, there is no need to raise water rates. But the city has been operating with a deficit in its sewer fund for about a decade, he said.
“We’ve got to stop the bleeding and make sure your revenues equal expenses,” Gardner said. “There is no way around it. Your rates need to increase. You are at that fiscal cliff. It’s a tough decision but it has to be made.”
He recommended the city raise its rates from $9.16 a month to $14.20 per month for residents within the city limits who use up to 4,000 gallons per month.
For residents living outside city limits who use up to 4,000 gallons per month, they currently pay a maximum bill of $13.74 each month. The proposed rate increase for those residents is $21.32 per month.
The proposed rates for consumption per 1,000 gallons is $3.55 for residents inside the city and $5.33 for residents outside the city limits.