Next year could bring a rate increase for sewer and water customers receiving services from the city of El Dorado.
The El Dorado City Commission heard about a proposed increase during their meeting Monday evening.
"In our 2014 budget we anticipated a rate increase and show additional revenue," said Herb Llewellyn, city manager. "We show several scenarios that generate additional revenue."
He pointed out the city currently has a two-tiered system where the more water a customer buys the cheaper it gets, but the state wants that inverted.
One suggested rate increase had the city eliminating one of the two tiers.
"It's about discouraging the use of water," Llewellyn said. "The other option is to keep both tiers and have a rate increase equal to both."
Kurt Bookout, public utilities director, talked more about the proposal.
"It's been a long time since we've had a rate increase," he said. "It will be eight years when this rate increase is implemented in January. In 2010 we actually lowered water rates by eliminating tier one which was the most expensive tier. It is unusual for a utility or municipality to go that long without a rate increase."
Bookout said the rates are only there to generate revenue to do work, and the last eight years they have had enough funds to sustain the work.
But that is not the case in the future.
"We have been increasing our efforts and focus over the last five years to replace the deteriorating water and sewer infrastructure," Bookout said. "We're replacing a lot more valves and a lot more pipes. We're trying to catch up with the deterioration rate so we can get ahead of the curve."
The work involves replacing two-inch lines to provide better pressure.
"We're out doing that every week," Bookout said.
They also are still finding valves that don't function any more.
"It hasn't been done in 80 years," he said. "There hasn't been a focused effort to go in and fix this stuff."
To make all of the repairs it would take $250,000 to $300,000 a year for 10 to 12 years to catch up the sewer infrastructure and $200,000 to $250,000 a year for 10 years on water.
Bookout also urged the commissioners to think about the price of everything they purchase over the last eight years.
"Everything else has gone up so our normal cost of doing business has gone up and we've absorbed that," he said.
Looking at scenarios for an increase, city staff talked about an 8 percent across the board increase.
"We went back and looked at that and thought it was too much," Bookout said.
Page 2 of 3 - That 8 percent would have been staying at two tiers, but staff felt it was the right time to go to one tier so they have a flat rate structure. Such a change would be most felt by the large water users, with them seeing a 15 percent increase.
"For the majority of their water they are paying less than you and I do for normal residential use because the bulk of their water is at that third tier," Bookout said.
For customers within the city, they would see a 4 percent increase in water and an 8 percent increase in sewer.
This would mean an average water bill would go from $16.04 to $16.72 and an average sewer bill would go from $23.89 to $25.87.
If the commission decides to move forward with this, the next step would be to write a new ordinance reflecting the increase. This would have to be passed by the end of the year.
The issue will come back before the commission in November to give city staff more direction to draft an ordinance to be voted on in December.
With the proposed increase, El Dorado would go from having the fourth lowest sewer rates to the sixth or seventh lowest in the state. While water is harder to measure because of conservation rates, El Dorado's water is a lot less than Wichita's.
The discussion led to a question from Mayor Mike Fagg on the operating budget. He said in the budget in 2011 the city borrowed $3 million from the lake debt reserve for the stadium. A portion of that would be repaid from the water and sewer funds, among others.
"I don't feel the football field is a water and sewer issue," Fagg said. "People inside El Dorado and outside didn't get to vote on that issue."
He said water and sewer makes up 65 percent of the repayment. He asked the other commissioners to give this some thought.
Fagg also was concerned about retirement costs, which are spread through all the funds including water and sewer.
He said he would like to know what other cities are doing for retirement plans.
The issue will return at a future meeting.
In other business, the commission:
• the commission heard about who is responsible for the upkeep of alleys. Llewellyn said there is a difference between easements and alleys. The city does not keep up easements, and alleys are not high on the priority list because priorities are set by traffic count. The city is driven by calls on such work.
• Fagg voiced a concern about trucks on Sixth and Boyer and asked if police could monitor the area more.
Page 3 of 3 - • the commission discussed Sixth and Main. Scott Rickard, assistant city engineer, said they did move the lines, trying to get the most room for the lane trucks turn into on Sixth but still being able to use the arrows. Staff watched the intersection during a busy time and thought it was functioning a little better. Commissioner Bill Young also asked about the left turn signal and Llewellyn said they had been looking at that also and would bring back some numbers on it.
• Fagg asked about the mistake on the rezoning on South Main. Jim Murfin, city attorney, said he looked into it and there was a mistake made. The best way to remedy it would be to renotify those who should have received the letter initially and let them the heard before a Planning Commission meeting and before the City Commission.
• Fagg asked about the principal and interest breakdown on the lake debt, which Llewellyn presented. Llewellyn said he had previously told the commission they had paid $4.3 million to the Corp of Engineers on the lake in the last five years. That number was actually the cash flow summary and they have paid $2.8 million. Fagg thanked Llewellyn for the information and said he agreed with it. In addition, Fagg thought operation and management money should be tracked separately. Bookout said he personally tracked it in his office. He said they have joined a group that is representing entities who have water in corp reservoirs across the United States. They are looking into if the O&M money is tied to need for money and not actual work.
• Llewellyn said he talked to the auditor and she said she did look at the budget they file with the state. He also checked with three other cities off of the top of his head and they had if not one difference then two differences in their budgets, although one was only $1 one year.
"Ours is all about there is an audit between both of those events," he said.