The Gravois Arm Sewer District Board of Directors voted Monday evening to raise user rates as proposed at two previous public hearings.
The 7.14 percent increase will raise the residential flat rate for sewer service from $56 a month to $60. The majority of the district's 916 customers are residents not businesses.
Commercial sewer customers 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.
While there was opposition to the proposal at the public hearings, the board went ahead with the increase, saying it is needed to stay solvent after principal payments on its last construction project kick in next fall.
The district owes approximately $7.8 million through low interest loans from USDA Rural Development for phases one through three of its regional sewer.
Those projects placed approximately $16 million worth of infrastructure in the ground and into a wastewater treatment facility.
The difference was funded by federal grants.
Currently only one-third of user fees are used for operations — about $21.52 per bill. The rest goes to interest and principal on its debt.
Out of $553,452 in estimated expenses for the 2013 budget, $270,720 will go toward loan interest payments and $44,844 for loan principal payments — averaging about $26,300 per month combined.
The addition of principal payments on the $5.2 million 30-year loan that was part of financing for phase three will raise expenses around $7,500 a month. Phase three almost tripled the district's customer base.
But even the rate increase is not enough to cover the rising cost from the principal payments for phase three.
With a large treatment plant in operation and many miles of main line now in the ground, the board is working to get financing for a fourth phase that it hopes will add enough customers at a low enough cost to stabilize user fees.
A $4.2 million project is currently proposed with preliminary plans submitted to the Missouri Department of Natural Resources State Revolving Fund. The submission simply puts the district in line with all the other entities around the state for project funds.