La Center may raise sewer rates
$5 a month hike would ease burden on reserve fund
Monday, March 4, 2013
La Center is sick of throwing money into the sewer.
The city may increase its monthly sewer rates for the first time since 2009, so it doesn't have to continue dipping into its reserve fund.
The City Council will decide whether to increase sewer rates by $5 a month at its March 13 meeting. The move is intended to take some of the financial burden off the city's reserves, which are often used to pay off debts owed by the sewer fund.
Councilor Al Luiz said he'd likely vote for the increase to prevent millions of dollars from being lost in the future.
He said the city can either ask residents to pay more or use the reserve fund — which he compared to a savings account — to continue paying on debt service at the sewer.
"We have to do something to take care of nicking into the reserves," Luiz said.
With the $5 increase, rates would increase from $51 to $56 a month, a figure that is not enough to fully pay what the city owes annually in debt services. To do that, the city would have to raise its rates to around $95 a month.
Finance Director Suzanne Levis said that if the city didn't use its reserves to bail out the sewer fund, it could be in a worse position. "The sewer fund has
been operating at a deficit for a number of years," she said.
Without a gradual increase to sewer rates, she said, the city could find itself in the position of asking for much larger increases down the road.
The city brought up the possibility of raising its sewer rates in December. The proposal followed a failed attempt to increase the city's casino tax as a way of protecting the reserves.
The casinos balked at the idea, and it was quickly replaced by a series of gradual increases to the sewer rates.
At the time, Mayor Jim Irish said the city needed to increase its sewer costs to bring the users' bills more in line with the cost of services.
Ray Bartlett, a financial consultant for La Center, recommended the city increase its sewer rates by $5 a month for a number of years.
There's been talk of extending that period to 2018, Luiz said.