Customers connected to the City of Camdenton’s water and sewer system could be facing cost increases if a rate proposal is accepted by the board of aldermen next month.

Customers connected to the City of Camdenton’s water and sewer system could be facing cost increases if a rate proposal is accepted by the board of aldermen next month.

A public hearing has been scheduled for Tuesday, May 2, 2017 at 6 p.m. at City Hall for the purpose of hearing comments from citizens on the issue of adjusting water and sewer rates as well as the schedule of fees.

“I’ve always been amazed at the steps we take to collect water and sewer bills, how well we work with the public, but there are some things here we feel need to be worked on,” Mayor John McNabb said. “Because we’ve been so lenient in the past we’re the last guy to get paid every month. It’s been quite some time since we changed these.”

On March 8, 2017, aldermen and city staff discussed a proposal to increase the base rate for water from $10 to $12 for the first 2,000 gallons of water used plus $4.15 (a 90-cent increase) for every 1,000 gallons thereafter. Sewer rates would increase from $8.28 to a base rate of $9, an increase of 73-cents based on water usage, plus $2.45 (a 27-cent increase) for every 1,000 gallons of water used.

However, after initial skepticism from the board, city staff said they would consider other proposals after conducting more financial cost analysis based on neighboring municipalities.

That new proposal was introduced on April 5, 2017 and came out more favorable in the city’s opinion. The new rates would go into effect starting July 2017, if passed by the board.

The new proposal would increase the water base rate $1 from $10 to $11 and increase the sewer rate 72-cents from $8.28 to $9.

“The proposed water and sewer rate increases would generate an estimated annual income of $33,126.52. An average residential customer using 5,000 gallons would see a $1.72-cent monthly increase or an approximate 4.4% increase,” according to a city memo. “This is far less than the 17% increase originally proposed last month.”

Some factors the city considered included the cost of disconnections/reconnections, material and labor, outlying connections and notifying citizens of late bills or disconnection dates. City Clerk Renée Kingston said it currently costs $25 per reconnection during business hours and $100 after business hours.

McNabb said the city would phase out sending notices through the mail to save money on postal costs. He estimated staff sends 300 notices a month, and can essentially accomplish the same thing through a robo-call that can prove the call was received.

Those robo-calls started Tuesday, April 4 and Kingston said most citizens were very receptive to the reminder to pay the bill.

Staff also considered the current cost of an additional $3 a month for residents who live outside city limits to connect to its water and sewer system. Hancock noted that the city still has approximately 1,680 customers, which has been similar to previous years.

Under the new proposal, the city would raise the meter connection fee as follows:

3/4’” — $575 to $900

1” — $700 to $1,150

2” — $1,000 to $2,500

The city also proposed raising the late penalty amount from 1.5 percent to 10 percent and the disconnect fees amounts from $25 for the first time, $50 for the second time in a 12-month period, $100 for a third time in a 12-month period and $100 plus disconnect fee for an after-hours reconnect.

By eliminating paper late notices, the city could also save water and sewer costs on postage.

“When reviewing our audit, and changing our rate analysis review from an accrual to a cash basis we note that the City had a net cast lost in 2015-2016 of $82,873. By implementing all the itemized recommendations the City could potentially gain an estimated annual increase of $63,076,” the memo states.

In March 2015, the board approved an increase in water rates for the first 2,000 (gallons or fraction thereof) from a minimum of $8 to a minimum of $10 per month prorated for the first month for new subscriber services.

Sewer rates were raised from $6.85 to $8.28 in addition to each contributor paying a user charge rate for operation and maintenance including replacement of $2.18 per 1,000 gallons of water (or wastewater).

The city also agreed to review the rates on an annual basis, but due to a variety of factors, this was not discussed in 2016, according to a staff memo from Hancock.

According to financial documents provided by staff, for the fiscal year of 2015-2016, the water/sewer sinking fund account had an accumulated total cash reserve of $136,777.15. Total cost of water services was $515,606.00 with an operating expense of $248,642.00 and total expenses listed at $505,566.00.

The total expenses derived from user charges was listed at $494,269.00 with a water rate revenue loss of $990.20, while the revenue generated by the sewer fund was listed as a budget surplus (deficit) of $125.60.