Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, October 2, 1993 TAG: 9310020165
SECTION: CURRENT PAGE: NRV-2 EDITION: NEW RIVER VALLEY
SOURCE: PAUL DELLINGER
DATELINE: PULASKI LENGTH: Medium
Town officials voted 4-3 at a special council meeting Friday morning to increase rates by 24 percent, effective immediately, to start bailing out the ailing water fund. Mayor Gary Hancock had to break the tie vote.
Town Water Department employees will read meters in early November for water used under the new rate this month, and customers will get their first increased bills in December.
But the decision was not arrived at easily.
Ernst & Young, a Washington, D.C., firm hired by the town to recommend a new rate structure and how to avoid future water fund deficits, will make its report in late November or December. But its consultants had recommended the 24 percent across-the-board increase now to keep the current deficit from growing.
Some council members had wanted to postpone the decision until they got the Ernst & Young report.
But Assistant Town Manager Rob Lyons said that Lisa Sharpe of Ernst & Young had estimated late Thursday night that the needed increase would be 36 percent if they waited that long. If the town changes its rate structure from the present tiered version, some customers would be paying more and some less but the average would be 36 percent, he said.
Councilman Andy Graham said he doubted that two months would mean that much of an increase. Graham has said for years that a rate increase is needed, but he objects to the structure that gives lower rates per 1,000 gallons to industries who use a lot of water.
"The low-volume users are subsidizing the high-volume users," he said.
Councilman Nick Glenn preferred to await the final report, even if the increase would be steeper by then. He had made the same argument Tuesday at a public hearing on the proposed rate increase.
"The public won't mind that if we can justify it to them, even it was a 50 percent increase come Jan. 1," he said.
"I may not have been at the same public hearing," Vice Mayor Rocky Schrader said. "I didn't hear anybody say they wouldn't mind a 50 percent increase."
Mayor Hancock said he doubted that it would be easy to come up with the new rate structure, even after getting the consultants' final report. "I don't think it's going to be an easy decision, or a decision we can make quickly," he said.
"I wish we had done an across-the-board increase back when we were doing our budget ... But we didn't," Hancock said. "Right now if we had an emergency in the water fund, we do not have the money there to meet the emergency."
Councilwoman Alma Holston said her concern was lowering the minimum rate for elderly or low-income residents who use less than 3,000 gallons a month. "I have agonized over what I was going to do here this morning," she said, asking that council consider a lower minimum when it comes up with a new rate structure.
She ended up voting with Junior Black and Rocky Schrader for the increase. Graham, Glenn and J.R. Schrader, who said "I regret some of my past votes" but worried about the effect of the increase on the elderly, voted against it.
Hancock broke the tie. "I don't feel like we can wait 'til Jan. 1 or Feb. 1," he said.
The interim recommendation from the Ernst & Young consultants also includes a 5 percent increase in mid 1994 and another 5 percent increase in mid-1995. Those increases would be based on whatever rate structure council has put in place by then.
Under the new monthly rates, the increase for people who use no more than 3,000 gallons a month will be $1.53, from $6.38 to $7.91 a month.
The charge per 1,000 gallons for the next 20,000 gallons goes from 99 cents to $1.23; for the next 200,000 gallons, 90 cents to $1.12; the next 777,000 gallons, 83 cents to $1.03; the next 2 million, 73 to 91 cents; the next 2 million, 63 to 78 cents, and for each 1,000 gallons over 5 million gallons, 52 to 64 cents.
by CNB