Georgetown Municipal Water & Sewer Service made its pitch to raise rates 28 percent to the Georgetown City Council Monday.
The council held a first reading on the proposed water and sewer rate increases with final approval slated at the July 8 council meeting. The rates would take effect on Aug. 1.
“Nobody likes rate increases, but there has not been a rate increase in 12 years,” Georgetown Mayor Tom Prather said. “There has been some infrastructure issues and maintenance that has been deferred over those years, but the time has come and they can’t be deferred any longer.
“The water board did their due diligence and has brought to us a business case to justify the rate increase. The board wanted to start with a smaller increase and a bigger, more gradual increase later so customers could plan for it.”
The scenario they settled on raises the current fixed water rate for a minimum of 2,000 gallons from $8.54 to $10.94 for Fiscal Year 2020 increasing each year to $14.38 in Fiscal Year 2024. The variable water rate (over 2,000 gallons a month) rises from $4.80 to $6 in 2020 and ends the five-year plan at $7.72. Sewer rates likewise increase from $7.82 at the minimum 2,000 gallons currently to $10.06 and ends 2024 at $13.13. The variable sewer rate rises from $5.58 to $6.70 in 2020 and increases to $8.23 in 2024. Rates for commercial and industrial customers are also increasing.
The average residential water and sewer bill will go from $33.59 to $42.14 in 2020, $45.40 in 2021, $48.34 in 2022, $51.19 in 2023 and $54.13 in 2024. The average number of gallons residents use is 3,900 gallons.
GMWSS General Manager Chase Azevedo explained to the council the process the utility’s board went through to come up with the proposed rates, including asking the staff and its contractors developing the study to come up with a third rate scenario that raised rates more gradually compared to the first two scenarios they were presented. GRW, the contractor for the critical needs study and rate analysis, put together a five-year plan and rates for those five years. The plan approved by the GMWSS board pays for the projects out of revenue and financing.
Azevedo explained the process included a critical needs study that identified 83 projects totaling $39.8 million that needed to be addressed. There is an additional 33 projects that Toyota Motor Manufacturing Kentucky will be paying for.
“That does not include work on Wastewater Treatment Plant No. 1 that is estimated to cost $42 million. Our current rates don’t support that project,” he said. “We wanted to work on putting together a plan that raised rates to meet needs so we didn’t have to come back and ask for another increase in the middle of the plan.”
Those projects were scored and ranked so they could be prioritized. For example, the electrical system needs repairs.
“It doesn’t meet code and is an accident waiting to happen. An employee could be electrocuted or a fire disrupts service to customers and then we’d be out being able to provide water while getting it repaired,” he said.
Councilwoman Karen Tingle-Sames asked if the water board looked at charging county residents using GMWSS more than city residents. Azevedo said they didn’t look at that because the board wanted to keep the current rate structure that they feel is easy to understand, and the county also invests several million dollars each year for county residents to access GMWSS.
She also asked about the South Sewer project and how those costs are affecting the rates and budget. Azevedo said they are having to do part of the work on that project anyway, and residents in the mobile home parks will be paying to tie into the system.
“We are having people in that part of the county who are wanting to develop and build, but currently we have to turn them away because we don’t have any way to take them on,” Prather said.
They will be adding some employees to handle the increased number of projects, including inspectors, but even with the increase, GMWSS rates are still ranked low in the Bluegrass Area Development District, Azevedo said.
“We are still in the lower quarter to third and that is with the 28% increase,” Councilman David Lusby said. “Considering the cost to deliver clean water is about half a cent a gallon, that seems to be a good deal.”
Prather and Azevedo both said that by identifying the critical projects, it helps them plan better for the future.
“The employees have been asking to have this done so they aren’t going year-to-year,” Azevedo said. “They did a good job of giving me needs and not wants.
“We’ve kept rates the same for 12 years. That was a priority of the administrative board to not raise rates at that time,” Azevedo said. “I don’t like being here talking about raising rates. But in the last 12 years we have not raised rates, the cost of insurance, chemicals and our utilities has increased 69 percent. We have reached critical mass.”
Councilman Mark Showalter asked Azevedo what would happen if council refused to agree to the rate increase.
“We would pay and thank GRW for their work so far, including Wastewater Treatment Plant No. 1. We would stop work on it immediately and the plant would be closed to any new business. We would have to work to stay out of a development moratorium,” Azevedo said.
“South Sewer projects would not be funded. And if I worked for the EPA, and saw that rates were not raised and that they are the lowest in the area, I know where I would send inspectors. They would come to Georgetown and see if we are meeting needs, and I don’t think anyone would want that to happen.”
Steve MCClain can be reached at firstname.lastname@example.org.