Success! Alternatives to Water/Sewer Rate Increases

It seems almost certain that Council will not support a 22% increase in water/sewer rates the Mayor had previously asked for. Council wanted to look for moneys elsewhere than in the pockets of citizens at a workshop on the morning of April 11, 2008.

Our thanks go out to the many of you who contacted Council and the Mayor asking them not to raise rates. Your input, as well as that from other sources, seems to have had an effect.

There were many suggestions which, when combined, would address the revenue shortfall. Among them:

• a hiring freeze;
• other budget cuts;
• a redistribution of the 40% now allocated for streets only, but for the most part unused, with 20% going to streets, and 20% to water sewer;
• a one-quarter percent sales tax, to work like the current Parks extra sales tax;
• assessing appropriate impact fees;
• using meter fees which are currently sitting unused;
• raise rates 3% now, as allowed by ordinance.

The Back and Forths of the Discussion

Ald. Zeller said that it looked like they were going to be firing people if they were to raise revenues through budget cuts.

Ald. Hahn, Harrison and Brammer immediately said they did not have firing in mind, and would not support such a measure. They did support a hiring freeze.

Jeff Bullock, left, asked if an increase would be effective. He pointed out that an increase in fees would result in a decrease in water use, in turn leading to a decrease in fees collected.

Randy Wolfenbarger, right, currently manager of Inn of the Ozarks and previously Mayor, said it was important that a sunshine clause be added to any sales tax. He pointed to the past when sales tax revenues went to things other than what was originally intended after the intended payoff had been completed. “I made a big mistake,” Wolfenbarger said, in not putting a sunshine clause on the increase.

Ald. Hahn was concerned that an increase in the sales tax would effect residents as well as tourists. An argument had been made that a sales tax increase should be enacted because it would effect only tourists.

If a sales tax is enacted, it would have to be approved by a referendum.

City Clerk M.J. Sell argued that impact fees would not have enough of an effect because building was down. Building Official Marion Chrysler was called in to testify, and noted that she presently had 2 new constructions, and the Purkeypile gallery downtown; as well as ten of the tree house buildings coming up.

Chrysler pointed out that she did not track impacts in remodeling.

Beverly Blankenship, left, suggested a 3% increase would be appropriate.

Public Works in the Discussion

Ald. Harrison had suggested the 20-20 split of funds between streets and water/sewer as something that would not require a referendum, and would not cost the residents more.

Dwayne Allen, right, of Public Works argued that an emergency might come up and Public Works would need all of the street funds, even if they have previously been unused, and so the 20/20 split between street and water might not work for them. Ald. Harrison pointed out that there was a $100K CD specifically for streets that could be used in an emergency.

Allen also spoke of the tremendous need that exists to fix the City’s streets. Ald. Hahn suggested that citizens, if given the choice between a 22% increase in fees and going slower on street repair, would no doubt choose to go a bit slower on street repair.

There was additional discussion about the savings that would be realized if leaks in water pipes were stopped. The City currently pays almost $300K to Carroll/Boone for water, up from $200K last year, so stopping leaks would have a significant effect on water charges.

Allen projected a $50K savings with a 20% decrease in leaks, noting that the City had a new leak detector (bought under previous PW director’s recommendation, but evidently not yet in use). The figure did not include the cost of identifying leaks, or their repair, however.

All in All

Stay tuned. Council heads are working, working, working….