Water rates: Rates to increase this year for infrastructure costs
By Toni Stauffer
2018 was a banner year for home building in Phenix City which saw more than a 52 percent rise in home builds. However, according to City Manager Wallace Hunter, that growth comes with a heavy price when you bring in the cost of utilities. Hunter warned Council members at the Jan. 2 work session that the City could follow the difficult steps of Auburn, and even Columbus, with water and sewer rate hikes.
“Look at what happened in Auburn and what happened in Columbus and the increases they had to make,” Hunter said.
Columbus Water Works initiated a five-year plan of increases to finance $50 million in bonds issued in 2016 for 25 water projects and a reinvestment in infrastructure, which raised the average residential bill from $50 to $63—an increase of $13. Auburn’s rate increase is now in effect as of this month, with the average bill increasing from $22.30 to 24.09—an increase of $1.79.
In Phenix City, the Council approved a 5 percent increase in 2017, 5 percent rate increase in 2018, and another 5 percent, effective April 1 of this year; however, because of the 4.5 million in upgrades to the water treatment plant, as required by ADEM in a state-wide mandate, water rates for corporate accounts may increase more than 5 percent. Smith said that Phenix City residents will probably see an increase on their bills comparable to Auburn’s increase. The final increase will be presented at the mayor’s State of the City address on Jan. 17, and with one more work session set for Jan. 14 with the regular session following on Jan. 15, nothing is set in stone yet.
“In utilities, as far as all the money we have to invest in infrastructure we’ve got to have is not there,” Hunter said, “and that is day-to-day operations.”
The Council surmised that the increased growth is from a combination of factors, primarily the significant cut in the “system development” fees and the good economy. Those fees were cut by $1,200 for 2018 and by $800 for 2019. Also, the tap fees for 2019 are at a 5% discount. While the cut in fees does encourage growth, it doesn’t help with repairing the existing infrastructure.
“We have 4,500 manholes,” Phenix City Utilities Director Stephen C. Smith said. “ADEM is requiring us to go in and rehabilitate those manholes, which is a very significant cost to us.” Smith said that the water treatment plant is pushing capacity, there is the sewer problem at Bridgewater and the water pressure problem up on Summerville Road.
Hunter expressed concern that the City might be heading in the same direction as the County, to face stagnant wages and the threat of layoffs. Additionally, the excessive rainfall from spring and summer, and now fall, has caused a huge loss in revenue for the City in utilities, a loss estimated to be from $600,000 to $800,000.
“It’s because we’re so resistant to doing the things we’ve got to do up front,” said Hunter. He asked Smith about how much annual revenue the City takes in with late fees and Smith answered approximately $200,000. Smith clarified the figure as being $183,678, which goes back fully into the Utilities account.
“It’s a shame that you (City) even depend on people being late to have that…you’re not supposed to be depending on that,” Hunter said, “and when you lose $600,000 or $800,000 in one year, because of so much rain and the ground is soaked—with all of the construction we’ve got going on and every site is full of water.”
Another large concern is the fast growth on the south side. “We’ve got to be prepared to serve from a water standpoint. It’s significant growth that we’re getting down there,” Smith said. “We’re going to have to raise rates significantly and restructure our rates to meet those costs. We don’t have a choice in that.” Right now, corporate accounts, like apartment complexes, pay less for water than residential. The system is set up so that the more you use, the less you pay, which is going to require change.
Councilman and Mayor Pro Tem Arthur L. Day, Jr. (Dist. 3) asked if raising rates this year is a possibility and Smith answered yes. According Mayor Eddie Lowe, the cost of not taking care of Phenix City’s infrastructure will be greater, as evidenced by the expensive struggle other older cities in our nation are having to go through to rebuild their crumbling infrastructures.
“If you don’t take care of the infrastructure, it will cost you in the future. You must have a good procurement strategy,” Lowe said. “Phenix City is getting older. We have pipes in the ground that are 80 years old.”
The Mayor will be speaking on this and other issues that affect Phenix City at the annual State of the City address to be held on Jan. 17 at the Idle Hour community center at 6 p.m. For more information on current Phenix City water rates, go to the City’s website at phenixcityal.us and search for utilities.