The city’s Water Fund needs help to make payments on the new $8.6 million water plant and $1.4 million water line improvements, the mayor says, so rates will likely increase later this year.
A review of city water bills by Wapakoneta city administrators revealed the increase proposed by Wapakoneta City Council members is necessary, Mayor Rodney Metz told the Wapakoneta Daily News Sunday, after confusion regarding the calculation of the bill arose during the May 21 meeting. Councilors are to expected to vote on the ordinance tonight.
“Basically, the problem was with council and administration not realizing what the units meant and how those units of water were calculated,” Metz said. “The minimum number of units is two and once we were made clear on that then the rest of the formula works.”
Water consumers are charged $7.72 for the first two units total and $3.25 for each of the next tier of units, thus 1st Ward Councilor Jim Neumeier’s bill of $14.22 was correct since he was charged with using four units of water. A unit of water is 748 gallons.
Under the proposed legislation, the first two units of water will increase to $8.11 and each additional unit will increase to $3.41, therefore Neumeier’s usage of four units of water would increase by 71 cents to $14.93.
Councilors-at-large Steve Walter and Tom Finkelmeier, who are both sitting members on the Utilities Committee, noted the average increase for a water consumer would be approximately 75 cents. They noted the increase would also increase the wastewater portion of the bill.
Under the proposed legislation, water rates will increase 5 percent starting Sept. 1 and then every Jan. 1 unless councilors pass an ordinance to slow or to stop the increases.
“These increases are very important to the city as the city has a liability it must pay, just like an individual or a business that has a loan, and we must make the payments,” Metz said. “We need to get the plant paid for and we must meet our obligations with the Ohio Water Development Authority (OWDA) and when these increases go through then we will be right on schedule.”
The city secured a zero percent loan on the $8.6 million Wapakoneta Water Treatment Plant and a low interest loan on the $1.4 million to develop a new well field and for water lines to transport water to the plant and from the plant back to the city.
Walter, who chairs the Utilities Committee, explained the increase is due to an 18 percent shortfall in the Water Fund because the new debt was not part of the budget forecast and existing debt was paid and cleared from the books. He said the city was not in crisis, but if no increase was made then the Water Fund’s reserve funds would be depleted in early 2014.
This would deplete the fund of any reserve dollars to maintain the system or make improvements if they were needed.
Metz said the plant should last far longer than 20 years with no major investments needed. The former plant operated for more than a century.
“Most of the equipment in the Wapakoneta Water Treatment Plant should last well beyond the 20 years which the OWDA has provided us the zero percent loan, but it really is a matter of keeping up with maintenance schedule during that time period,” Metz said. “We need to put money aside so we can meet the maintenance schedule and in 10 to 15 years we will have enough of a reserve fund built up to take care of most maintenance items and if there is a catastrophic occurrence then we are looking at warranties and legal action.”
The only new piece of legislation this week is an ordinance to name the park being developed at the former Centennial Elementary School site as Breakfast Optimist Park.