by BRAD ROLLINS
The Kyle City Council is on course to raise wastewater rates by 20 percent and steeper increases are likely as the municipal government seeks to align utility revenue with expenses.
Under a plan given preliminary approval Tuesday night, residential and commercial customers would see a 20 percent increase both in their base rate and in the charge that fluctuates each month based on the amount of sewer service used in 1,000-gallon increments. The hike amounts to $3.79 for the average household in the city limits, which uses about 5,000 gallons of wastewater service a month, said finance director Perwez Moheet.
The city council anticipated an increase when it set the budget for the 2010-11 fiscal year that began Oct. 1 but never enacted the hike, Moheet said. The increase, if it is approved on second reading later this month, won’t be reflected in utility bills until August, Moheet said.
Council member Brad Pickett, who was joined by council member Jaime Sanchez in voting against the increase, said the city should consider a steeper hike to make wastewater utility pay for itself. Balancing the fund’s budget this year would require an 87 percent increase, Moheet said.
“We have to start paying for what we’re using. Councils in the past have hesitated to make these moves. We have to have the fortitude to do so,” Pickett said.
A council majority clearly had no interest in nearly doubling rates in one fell swoop, but several said the city should look at both the utility rates and general fund transfers during the summer budgetmaking process for next fiscal year.
The city’s wastewater fund has run a deficit four of the last five years due in part to the sizable transfer of money received from wastewater customers to the city’s general fund where it essentially helps offset property tax. This year, the city is on course to transfer $1,883,669 from wastewater revenue to the general fund – nearly 40 percent of the fund’s revenue.
Councilmember Russ Huebner said using auxiliary funds as stop-gap in the general fund budget puts a disproportionate load on low- and fixed-income residents.
“I would prefer that we get rid of the [general fund] transfer. We need to transfer the extra costs over to our property tax where it will not affect lower income residents as much as raising [utility] rates would. ... It’s ridiculous and I think everybody agrees with that,” Huebner said.
Also at Tuesday’s meeting, the council added $675,408 to the current fiscal year’s budget to cover expenses that were left out of the original document.
