Starting in July the water and sewer rates in Junction City will be increasing each year for the next ten years in order to fund immediate and long term improvements to the city’s water and waste water systems.
The City Commission voted 5-0 Tuesday night for the increase.
Starting July 15th, 2014 water rates will increase 6.5 percent while the waste water rate will increase 5.5 percent. The increase was included in a Water and Wastewater Financial Business Plan developed by Raftelis Financial Consultants Inc.
Tom Beckley, Senior Manager with RFC INC., explained that he worked with HDR Engineering along with city staff to determine the proper rate increases over a period of time in order to fund the necessary improvements needed.
“Really we spent a lot of time with HDR and City Staff to develop this plan to kind of smooth out the rate increases over a number of years. That’s why we went with the extended scenario because initially the capital plan was even more front loaded and by pushing those out a little bit it allowed us to provide a more smooth rate increase,” Beckley said.
The increases are spread out over ten years. Water rates will continue to increase by 6.5 percent through the year 2019. The increase will then decrease to 6 percent in 2020, and decrease again to 4.5 percent in 2021. In 2022 the increase will drop again to 4 percent where it will remain through 2024.
The waste water rate increase will actually increase from 5.5 percent in 2014 to 6.5 percent in 2015. It will then decrease to 6 percent in 2016 and stay at 6 percent through 2022, before decreasing again to 5.5 percent in 2023 and 3 percent in 2024.
Commissioner Mick McCallister explained that the increases are needed in order to make the needed repairs over a long period of time instead of all at once, which would have been a bigger burden financially.
“In other words what we have is broke. It’s outdated, it’s overage, we need repairs, we don’t have the money to do that. So we are looking at a way to ease into making these repairs over an extended period of time, and we’re raising the rates so we can raise revenue to make these repairs easier to absorb than doing it all at once,” McCallister said.
Beckley responded in saying that some of the increases are necessary to cover inflationary cost increases in just the operating and maintenance expenses.
“When you look at the cost of utility, they face the same inflationary pressures as everybody else, to some extent. Electricity costs go up, chemical costs go up, employee costs go up, insurance costs go up. It’s important to recognize that even if we didn’t have additional capital needs we would still have those inflationary increases,” Beckley said.
Greg McCaffery, Municipal Services Director, explained that the typical customers monthly rate is around $50 and $55. With the rate increase those customers should be looking at a $5 or $10 increase per month depending on the amount of water they are using.