Several customers of the Gravois Arm Sewer District attended two public hearings last week held by the board of directors on a proposed rate increase across all categories of approximately 7.14 percent.
After taking public input, the board will likely vote on the issue Dec. 2.
Most of the customers in attendance opposed any increase with rates already the highest in the area and among the highest in the state.
The board explained its position as one of necessity to help the district stay solvent.
Principal payments on its USDA loan for phase three will begin next fall. Once that happens, the district will go from barely operating in the black to a significant dip into the red if the board doesn't make some changes.
The district owes approximately $7.8 million through low interest loans from USDA Rural Development for phases one through three of its regional sewer, but those projects placed approximately $16 million worth of infrastructure in the ground and into a wastewater treatment facility, according to Chair Dave Taylor.
Despite savings from grant monies, the district still has significant debt to pay off.
The balance of customers' bills goes to pay down that debt — only an estimated 1/3 of user fees, about $21.52 — goes toward operations each month.
The district's $589,000 budget for 2013 comes from approximately 916 customers. With customer paid late fees, dump income and interest income, revenues are estimated to reach $600,000. Expenses for the year were estimated at $553,452.
Through October, the board has been within budget by varying degrees seven of 10 months. Year-to-date at the end of October, the budget was in the black by approximately $29,000 with a monthly average in the black of $2,920.
One full time and two part time employees takes care of daily operations, for approximately $51,000 annually in contract labor.
Other operational expenses include around $37,000 for electricity and other utilities. Another $26,700 was budgeted for repairs in 2013 and fees for administrative, bookkeeping, lab and audit services were budgeted at approximately $32,000.
Smaller expenses that quickly add up include $5,400 for fuel, $4,320 for mileage reimbursement, $7,500 for service and maintenance on vehicles, $4,300 for fees, licenses, permits and line location. Insurance figured into the budget at $10,000. Supplies for the treatment system totaled about $6,500.
According to Taylor, the board has cut all expenses it can cut at this point. The board cut the budget as deep as it could, he said, to get through the construction of phase three.
The board also transfers about $17,000 to its bond reserve account and another $17,000 to its replacement and extension account.
The big money comes from the loan payments that paid for the infrastructure to get customers online.
The district budgeted $270,720 for loan interest payments and $44,844 for loan principal payments - averaging about $26,300 per month combined.
Page 2 of 2 - In local municipalities with sewer, such as Laurie, those loan expenses are subsidized by a 1/2-cent capital improvement sales tax which the district was not set up to collect.
According to Taylor, the addition of principal payments on the $5.2 million 30-year loan that was part of phase three financing will raise expenses around $7,500 a month. Phase three added around 600 users to the system.
Even the proposed rate increase is not enough to cover the rising cost.
With a large treatment plant in operation and a "spiderweb" of pipe now in the ground, Taylor said the board is now working toward a fourth phase that it hopes will add enough customers at a low enough cost to stabilize customer bills.
A $4.2 million project is currently proposed with preliminary plans submitted to different government funding agencies including USDA and Missouri Department of Natural Resources State Revolving Fund.
The board is proposing to raise the residential flat rate for sewer only from $56 a month to $60. Most of the district's customers are residents, not businesses.
Yet, off the lake, the Gravois area is among the least affluent in the lake region.
While the median household income (MHI) for the Gravois Mills zip code was $36,727 in the 2010 Census, 1,039 of a total 2,241 households had an annual income of less than $35,000.
Median earnings for workers — who have to travel an average of 22 minutes to get to work — was $20,992, and per capita income was at $21,819. There were also 1,182 households receiving Social Security.
It should be noted that not everyone in the 65037 zip code is within the GASD boundaries and only an estimated 25-30 percent of around 4,000 potential customers in the district are currently hooked up to the sewer service.
The Village of Gravois Mills proper is served by the district and was the district's first phase of construction.
The 38 households within the city limits have an MHI of $22,500, according to the Census, with 21 households on Social Security. The per capita income is $11,859, and median earnings for workers — who travel an average of 45 minutes to get to work — is $14,000.
The MHI in Laurie was $28,125 in 2010 and $27,500 in Sunrise Beach. The MHI for Morgan County as a whole was $36,696, $40,200 in Miller County and $44,617 in Camden County.