Purpose Of Water And Sewer Increase, To Create Contingency Fund

Purpose Of Water And Sewer Increase, To Create Contingency Fund

By Linda Farneth

State and Federal mandates require localities to manage their money wisely. One such requirement is the mandate to have an amount equal to 20% of the yearly operating budget/cost, set aside in a contingency fund for water and sewer.

A few weeks ago Colonial Beach Town Manager Quinn Robertson proposed a significant increase to water and sewer rates.

Robertson discussed the proposed water and sewer increase during a budget presentation. Although public works activities are funded by the general fund and included in the budget. Water and sewer must pay for itself through fees.

“We are still trying to go through the exact details of the water and sewer separate from the general fund,” Robertson said. “But we wanted to go ahead and preliminarily address it. What we are seeing is the necessity for an increase in water and sewer rates.”

Current water and sewer rates are billed quarterly at $235.00. This breaks down to $24.10 a month for water and $54.23 a month for sewer.

Robertson proposes that water and sewer rates be raised to $35.00 a month for water and $66.67 a month for sewer for a total combined raise of $23.34 a month.

Billing Quarterly, if approved by council, water and sewer will rise from $235.00 to $305.01, which is an increase of $70.00 per quarter.

Robertson said, “This increase in water rates is actually what we recommended last year but we did not implement.”

At the April 17 Council meeting Robertson followed up on his previous presentation to the council with documentation/spreadsheets outlining the cost of operations for both the water and sewer funds. He also stated that the proposed increase would fulfill a mandate which requires localities to have at least 20% of yearly operating costs, tucked away in a contingency fund to cover unforeseen repairs.

This fund would be drawn from throughout the year for large repairs on an as-needed basis.

Vice Mayor Robin Schick asked a series of questions.

Schick first clarified that the intention is to collect money to reach the 20% contingency fund in one year, then asked, if the town would we be able to lower rates once the contingency fund is raised and if it is not dipped into.

Quinn Robertson said he needed to check to be sure but he believes that once that threshold has been reached the town no longer has to bill for it, but he added, “It is my understanding is that every year the waste water treatment plant is going to go to those cash reserves when needed.”

Discussions revealed that part of the proposed $23.33 per-month increase is needed, simply to cover the cost of operations, which the current rates do not support. In order to cover costs alone bills will need to be raised to ensure a 10% increase in the operating budget. The remainder of the proposed increase is to build up a 20% contingency fund.

Mayor Eddie Blunt said unfortunately the cost of chemicals used to treat water keeps going up in price.

Schick kept asking if there was a way that the fees could go back down after the contingency fund is collected. But the answers did not sound promising for a decrease.

It must be noted that the proposed increase has not been passed yet.

Currently water is still being charged at a flat rate. Water meters have to be evaluated and discussions will continue to determine how to bill once the metered billing begins.

Once metered billing begins it is anticipated that there will be a flat fee for a minimum usage then a price per hundred gallons after that amount is reached.

We will continue to update you on any changes to the water and sewer bills.

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419
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