With principal payments coming due next year on loans for the Gravois Arm Sewer District's last construction project, the board of directors is proposing an across-the-board rate increase for users to help cover the cost. Another phase of construction is also planned to try to get more customers paying on the system.
Public hearings are planned Nov. 18 and 21 to discuss the measure tentatively proposed to increase rates by 7.14 percent.
The GASD is currently meetings its obligations with about $1,200 left over each month.
According to GASD board chair Dave Taylor, the district will start seeing an additional payment of $7,500 per month in October 2014 as principal payments on the $5.2 million 30-year loan that was part of phase three financing begin. Phase three added around 600 users to the system.
The low interest loan was through the U.S. Department of Agriculture Rural Development which allows entities to pay interest only for the first couple of the loan as the service gets up and going.
The proposed rate increase now would allow the district to build up a reserve to help cover the gap when it comes, but the rate increase alone is not enough to continue meeting that obligation.
"We'll probably still operate in the red but hopefully for no more than a year," Taylor said.
A fourth phase of construction now in the preliminary planning stages is intended try to get 200 to 400 more customers on line in addition to the approximately 921 now receiving service.
There are a number of homeowner associations off of Route O and Route P that have sought service from the district, according to Taylor.
The new users would be selected based on their proximity to existing lines to make hook-ups cost effective in order to balance the expense of phase three.
Taylor estimated it would be a $4-5 million project with some kind of financing package likely through USDA Rural Development.
What rate increase means for customers
For residents that would mean seeing their monthly bill go from $56 to $60.
It is more complicated for commercial sewer customers who pay a minimum flat fee as well as per unit charges. Both the flat fee, $61.02, and the per unit charges, which vary depending on type of business, are proposed to be increased by 7.14 percent.
The increase would bring the flat fee up to approximately $65.38.
For motels and resorts, an additional $9.99 per unit is currently charged. That would increase to $10.70 per unit.
For food and beverage services, an additional $1.11 per seat is charged. That would increase to approximately$1.19 per seat. It also costs $55.48 for grease trap maintenance for retail businesses with commercial kitchens.
Page 2 of 2 - The school is charged an additional $1.11 per student which would increase to $1.19.
A gas station has an extra charge of $55.48 per month on top of the minimum flat fee. That additional charge would increase to $62.62.
These rates were set at the time of the last rate increase which was effective Jan. 1, 2012.