Columbia water customers could see 4.3% increase in water, sewer bills this summer

Columbia’s 142,000 water and sewer customers are likely to see a 4.3 percent increase in their rates starting this summer if City Council adopts the rate recommendations.

Customers – more than 100,000 of them located outside of city limits and already paying higher rates because they don’t pay Columbia taxes – would add between $2.26 to $12.77 to their monthly bills. The totals would depend on whether they are residential or commercial customers and where they are located.

A draft city government budget that would take effect July 1 also includes $350,000 more for four code enforcers, $300,000 more to hire seven workers to improve the city animal shelter and $200,000 more to hire almost two dozen summer lifeguards at the new Greenview Aquatic Center.

Altogether, the 2016-2017 budget the city manager recommended to council calls for at least 10 new employees. Council is likely to cast its first of two votes June 7. A public hearing is tentatively set for that date. Council’s next session to discuss the budget is set for May 10.

The city’s two biggest accounts – the general fund and the water/sewer budgets – total $287.2 million, up $22.7 million or 8.6 percent from this year’s budgets for those accounts, according to figures released last week by Columbia budget director Missy Caughman. That increase holds true if council approves the 4.3 percent rate hike.

“That’s questionable at this point,” Councilman Howard Duvall said of the rate increase. “I think it’s going to be a close vote.”

Utility rate increases

Water and sewer customers did not pay a rate increase during the current fiscal year that ends June 30.

But rates rose 8 percent each of the two previous years, and increased 5 percent five years ago in fiscal 2011-2012, city figures show.

A big increase in the base rate that took effect July 1, 2013, caused such a ruckus that council later reduced the hike for commercial and customers who use lots of water by 36 percent to 50 percent. Base rates are fees charged for providing water service to meters, not for the volume of water used. It has not been decided whether base rates would change in the upcoming budget, said Joey Jaco, Columbia’s director of utilities and engineering.

If the 4.3 percent hike is approved, a typical in-city residential customers would pay an average of $2.26 more per month. That would increase the typical bill to $54.75, a rates analysis by the city’s consulting firm, Black & Veatch Corp., shows. Residential customers amount to almost 36,000 of all the roughly 41,700 customers who are within city limits, according to data from Columbia’s utilities department.

Actual bills depend on each customers monthly water usage, which usually increases during the summer.

Most of the nearly 93,700 homeowners outside the city would pay an average of $3.80 more, or $93.03 monthly, the consultants’ analysis shows.

A typical commercial customer inside the city would pay an average of $7.49 more monthly, raising the typical commercial bill to $184.34, according to the consultants. There are about 6,000 commercial customers in the city, utilities department numbers show.

If the commercial customer is outside of city limits, the average monthly increase would be $12.77, raising the typical commercial bill to $313.52, Black & Veatch calculates. There are about 7,000 out-of-city commercial customers.

A 4.3 overall increase is projected to generate $5.3 million in additional revenue, Caughman said. All of that money would go toward improvements of the water and sewer systems, which also would reduce how much Columbia will borrow to invest $140 million as planned in 2016-2017 for upkeep and upgrades, she said.

If the rate hike is adopted, the city’s budget for water and sewer services would reach $148.5 million. The general fund budget, which pays for most other city services, would be $138.8 million. Together, they amount to 91 percent of the total budget for running the capital city.

Some council members are complaining about a 4.3 percent rate increase. But others, including Duvall and Mayor Steve Benjamin, are backing an increase of that size to avoid larger hikes during the next few years.

Other big-ticket expenditures

A sampling of other expenses for programs or services in the 2016-2017 budget proposal include:

▪  $140 million to maintain or upgrade the water and sewer systems: $80 million for sewer lines that are under a federal court order to improve; $60 million to enhance the water system. The city plans to borrow about $120.4 million of the $140 million, said Jeff Palen, Columbia’s chief financial officer.

▪  $1 million to complete a pay and classification study for the city’s workforce and to pay the rising cost of health care and other benefits. The changes in job duties and pay rates is in its second year.