Staff writer
The cost of producing drinking water in Marion is more than the revenue collected from customers.
And, like any responsible utility, the City of Marion is going to have to figure out how to offset those expenses.
The most logical way, Marion City Council was told Monday evening, was to raise water rates.
At the end of the discussion, the council approved a $2 per month increase of the base rate and a $1.25 increase per 1,000 gallons, after the initial 1,000-gallon-usage.
Currently, city customers are paying a $24 base rate each month which includes the first 1,000 gallons of water. Marion customers then are charged $2.50 for each additional 1,000 gallons used.
It was determined the average residential customer uses about 5,000 gallons of water per month, making the average water bill about $34 per month. With the increase, the average water bill could be approximately $41 per month or approximately $84 more per year.
After an in-depth presentation by city administrator David Mayfield, his recommendation to the council was to increase the base rate to $26 per month which still would include the first 1,000 gallons of water, and $3.75 per 1,000 gallons after the initial 1,000 gallons.
The reason for the cost increases is simple — the new ozone system.
Residents may recall a few year ago when EPA (Environmental Protection Agency) regulations increased which required the city to look at water treatment options, Mayfield said. The city determined the most viable option at the time was using the ozone disinfection system.
The 2009 budget has $497,627 allocated for the water plant. The cost to make potable water is $226,843 per year. However, only about $150,000 is available for production in the budget.
“The base charge takes care of water distribution, bond payments, and infrastructure,” Mayfield said, which total about $270,000.
However, there’s a new wrinkle in the process. EPA now is looking at the amount of the bacterium, E. coli (Escherichia) found in surface water facilities. Mayfield said after nine out of 24 tests, it appears the city will exceed the maximum amount allowed.
If that occurs, the city will have to test for cryptosporidium which can cause humans to become ill if ingested.
Twenty-four tests for that condition could cost the city between $25,000 and $30,000 annually.
Mayfield said with projected costs to operate the water plant and with added costs for testing, the city comes up $83,000 short.
He also suggested the city sell water to Marion County Lake customers at the same cost as to its city customers.
Currently, Marion County Improvement District #2 pays $2.37 per 1,000 gallons.
Councilman Stacey Collett asked whether lake customers should be charged the same amount since they are charged more for maintenance and distribution.
“It costs the same to make water for city customers as it does lake customers,” councilman Gene Winkler responded.
Mayor Mary Olson agreed lake customers shouldn’t be charged as much as city residents. Councilman Steven Smith said he agreed with Winkler.
Smith suggested increasing the lake customers’ rates by 13 cents which would keep the rate consistent with what had been done in the past, making it $3.62.
City public works director Harvey Sanders commented this was a wet year with less water being used.
The comment was made if the city should lose 20 customers from its current 990 residential customers, the city could lose money at the proposed rates. Mayfield said costs were going to be the same whether we have more or fewer customers because we have to produce the same amount of water.
Economic development director Doug Kjellin said the city could make more money if more water was used.
Olson asked if water production costs would be affected by the new swimming pool. Collett said the pool would only be filled once a year.
The increase would become effective during the first billing cycle in January.
The council also was asked to consider an adjustment in how the city charges two large water users in town.
Mayfield said there are two businesses that use a large volume of water which is not all flushed through the city’s sewer system.
“It’s not fair for them to pay for 200,000 gallons of water and then for 200,000 gallons flushed through the sewer system,” he said.
Customers are charged $1.20 per 1,000 gallons for sewer charges.
No action was taken on the second recommendation.