No variable specified
Roswell council to vote on $1 increase in basic water rates
by Joan Durbin
May 29, 2013 11:09 AM | 1664 views | 1 1 comments | 24 24 recommendations | email to a friend | print
Roswell city council members are expected to vote tonight on whether to raise the rate for city water for its customers.

A resolution to increase the rate was on Wednesday’s agenda.

“We have proposed a $1 per month increase in the water base rate as we discussed in our water plant information meetings beginning last year,” said Stuart Moring, the city’s director of public works and environmental department.

“It was evaluated in a preliminary way at that time, and more recently confirmed by our finance department review, that that will provide us the necessary coverage for the loan we expect to get from the Georgia Environmental Finance Authority later this year to finance the water plant.”

Roswell Finance Director Keith Lee said the GEFA loan requires a debt coverage ratio of 105 percent. To accomplish this, Lee said, three things have been built into the Water Fund financial plan: pay off old GEFA loans, decrease the city’s dependence of Fulton County wholesale water and increase the base rate by $1 per month.

“The annual payment is anticipated to be around $860,000 annually, and the above referenced increases in revenue and decreases in expenses, along with current profitability, provides the debt coverage,” Lee said.

The new plant’s estimated cost is more than $16 million. Design is underway and the project should go out to bid in the fall. Construction is slated to start in late 2014 with completion the following spring.

Even with construction funding not in play until sometime next year, city staff recommended the rate hike be implemented sooner.

“As to the timing of this increase, we wanted to have that included in the budget so there are no surprises as we move forward,” Moring said.

“We think it is prudent to maintain a healthy reserve fund for contingencies, and this allows us to start building that and work out any kinks before we actually have to start spending the money early next year.”

Councilman Kent Igleheart said that with the city making the choice to stay in the municipal water business, it would not make sense to put more money into an obsolete water plant.

“There are substantial long term savings in building and operating a new larger plant over the costs of maintaining and upgrading the old plant and continuing to buy water from Fulton County. But there is obviously an upfront cost to build a new plant.

“The $1 base rate increase covers that cost, and in fact, is the same amount of increase water customers were told it would be when we started considering a new plant.”

*We welcome your comments on the stories and issues of the day and seek to provide a forum for the community to voice opinions. All comments are subject to moderator approval before being made visible on the website but are not edited. The use of profanity, obscene and vulgar language, hate speech, and racial slurs is strictly prohibited. Advertisements, promotions, spam, and links to outside websites will also be rejected. Please read our terms of service for full guides