Around two dozen Cassville community members attended an infrastructure task force meeting held at Cassville City Hall on Monday. During the session, Eugene Dilbeck, city administrator, presented a chart that offered more detailed information on the Missouri Rural Water Association's (MRWA) proposed water and sewer rate increases.
"There have been a lot of assumptions made that the city already has a plan, but we don't," said Dilbeck. "We have a report from MRWA that says what the rates need to be to cover our expenses, build a capital reserve and qualify for grants.
"We do not have a plan that the council has acted upon," said Dilbeck. "We hope to develop a plan that we can present to council for consideration with all of the concerns that you have."
The chart, which is printed on page 10, includes a breakdown of the present and proposed water and sewer rates in regard to monthly usages. The chart includes three scenarios, which identify the rates needed to sustain the system's current operating costs (Scenario #1), establish a capital projects reserve fund (Scenario #2) and make the city eligible for federal grants (Scenario #3).
According to the chart, using the Scenario #1 proposed by MRWA, Cassville customers who use less than 1,000 gallons of water per month would see an increase of $1.44. Customers who use over 10,000 gallons of water per month, such as the Cassville R-4 School District and 133 other users would see a minimum increase of $248.92 per month.
Under Scenario #3, which is based on 2 percent of the medium household income in Cassville, customers who use less than 1,000 gallons of water will see a $7.22 per month increase. Customers who use over 10,000 gallons will see a minium increase of $485.43 per month.
"I think this brings into focus a couple of things," said Dilbeck. "The people who use less water will not see a significant jump in rates, but there will be a significant increase for the high end users, especially the commercial users.
"Right now, all customers pay the same amount," said Dilbeck. "We might need to give some level of consideration for a residential rate and a different rate for our industrial users."
John Starchman asked if a special cleaning process is needed to process commercial wastewater. Due to the fact that none of the current commercial utility users place heavy metal particles in the wastewater, the city does not require a special cleaning process or incur extra costs to process commercial wastewater, said Dilbeck.
Jon Horner asked how Cassville's current and proposed rates compare to neighboring cities. Dilbeck stated that he could provide the task force with that information.
"Every town is different," said Dilbeck. "Most of the neighboring towns offer different rates for their commercial and residential users. My point is that we have to have the revenue to keep our system up."
During the meeting, Steve Walensky, public works director, shared a slideshow of photos depicting some of the city's water tower maintenance issues, which will be completed through a 10-year $540,000 maintenance agreement with Utility Services.
According to Dilbeck, Utility Services estimated that it would cost $484,000 to correct all of the maintenance issues at the city's water towers. The agreement will allow the city to spread the costs over the 10-year period. Cassville will pay Utility Services $54,000 per year.
"We want the citizens to understand why the rate increase is necessary at this time," said Dilbeck.
Although proposed Scenarios #2 and #3 would provide the city with funding to address current maintenance needs, neither scenario will provide enough funding to complete an extensive inflow and infiltration correction project that must be completed within the next five to 10 years.
Additional revenues from the rate increase could provide the city with funds that could be used to make bond payments, if the city successfully passes a bond issue to finance the multimillion dollar project.
Dilbeck stated that the city will likely need to obtain some grant funding to help pay for the inflow and infiltration improvements. Gail Purves pointed out that currently there is no grant funding to pursue.
"I understand that you need some type of rate increase," said Richard Asbill, Cassville R-4 School District superintendent. "The school district uses six and a half million gallons of water a year. I can't increase rates in one or two years for families that are already struggling on fixed incomes. I can't raise lunch rates now, because we don't have people who can pay."
Based on the proposed rate increase scenarios, the Cassville School District's rates could increase between $20,000 and $60,000 per year. That type of increase would require a reduction in staff or services, said Asbill.
"Unfortunately the situation has not been managed over the years," said Dilbeck. "The last rate increase was in 2002 and that increase did not go by the recommendations from the company that came up with the rate increase. The city was still not breaking even at that point."
Asbill recommended the city look at a staggered approach when introducing the rate increases.
"I understand that you are trying to dig out of a hole that was not created yesterday," said Asbill, "but I need to think about how I can get Cassville R-4 into a better situation in three years rather than in one year. Can we get anything short term?"
Alderman Terry Heinz asked Dilbeck why the city staff has not developed a staggered rate proposal.
"It seems to be a concensus that everyone wants to see a staggered rate increase," said Heinz. "We should be talking about that."
Dilbeck stated that the city currently has enough funds to pay the $54,000 payment on the tower maintenance agreement this year and next year, but extra funding will not be available until after 2012.
"We are looking at our immediate concerns and at what other cities are doing," said Dilbeck. "We will be using the remainder of the COP (certificates of participation) money to complete the meter replacement project, but after that project that funding will be gone too."
Dilbeck said that he would like to present an utility rate increase proposal to the Cassville City Council within 30 days. He also hopes to see the council approve a rate increase by the end of the year.
The next infrastructure task force meeting will be held at 7 a.m. on Sept. 6. Dilbeck said that he will present more information regarding maintenance costs and utility rates charged by neighboring cities at the next meeting, which will be open to the public.