Newton City Commissioners revisited a recently approved increase in sewage rates at a special work session Monday evening and may end up altering that increase.
Commissioners previously voted in favor of adding a flat fee to residents' utility bills. The increase is needed to fund an estimated $23 million wastewater treatment plant upgrade, allowing the city to meet stricter regulations at the state and federal level.
The cost of refusing to perform the upgrade could be fines of $10,000 a day, but commissioners said they also were concerned about how an increase in sewage rates would impact community members.
“What’s fairest for our people, especially our fixed income people?” Commissioner Leroy Koehn asked during the work session.
Commissioners looked at several options for generating funding for the wastewater treatment plant upgrade. Jerry McKenzie, a consultant with MGT of America, had originally recommended the city adopt a flat fee of $17.75 per month for residential users, and $51.44 for commercial, institutional and industrial users.
At the work session, McKenzie brought forward additional proposals, as the commission had requested, that would address the differences between various types of customers. The goal, he said, is to make sure smaller customers with little impact pay less than bigger customers with a larger impact.
“You’re trying to make sure that it’s representative of the service that’s being provided," he said of the rate.
Rates based on square footage may seem to be more fair at first, but large facilities don't necessarily use more water. For example, a 100,000 square foot warehouse with one bathroom and one sink may actually use less than a fast food restaurant with a smaller square footage. The number of residents/occupants also can impact the water usage.
Another proposal is an increase based on consumption. This option would include a 37 percent rate increase. Current sewage rates for 2014 are a $30 monthly minimum, then $8.70 for each 100 cubic feet after. The new rates would be a $41.03 monthly minimum, and $11.90 for each 100 cubic feet after.
This option would not differentiate between residential and commercial users and could potentially be a less stable source of funding than other options, McKenzie said. It would need to be re-evaluated each year to make sure people are consuming enough water to generate the needed revenues to make the debt payments on the wastewater treatment plant project.
A third option is a revised flat rate, with a $17.75 fixed fee per month for residential users; a $25 fixed fee per month for commercial customers; and a $135 fixed fee per month for large users.
McKenzie said whatever option the commission chooses, they need to make sure they can raise enough money to keep up with the debt payments for the upgrade.
Page 2 of 2 - “No one wants to pay more, but the fact is, we’re going to have to pay more," McKenzie said. "... I’m trying to keep you out of jail. You don’t want to default on your KDHE loans.”
He said it's also important to make sure customers understand why there’s an increase, and he recommended the increase be listed as a separate item on the bill so people know exactly how much money is going to the upgrade project.
“People need to know what they’re paying for, why the bills are going up,” McKenzie said. “... It needs to be shown on the bill.”
Commissioners will make a final decision about rates at a future meeting.