Electric costs, wages drive Purdy budget
Aldermen delay action on more sewer rate increases
Purdy residents for the present time will see no changes in their billing following passage of a new city budget. Aldermen reviewed options on again raising sewer rates but delayed action while talks continue with the Missouri Department of Natural Resources (DNR).
Mayor Steve Roden said the budget included no planned capital improvements "except the big one," referring to the impending sewer project.
"We're holding tight till we find out where we're going [with DNR]," Roden said.
The only other major change in the budget called for 3 percent wage increases for city employees and corresponding benefits for tax withholding.
In preparing the budget, Clerk Debbie Redshaw observed she had no idea what would happen to insurance costs for the coming year, which comes due in February. After talking with carrier representatives, Redshaw included a 4 percent rate increase, an increased cost to the city of approximately $1,330.
On a less optimistic note, Redshaw conceded that sales tax income has not come close to the 2011-12 fiscal year total. She lowered projects by 29 percent to anticipate no growth over the 2013-14 total.
Increases in the cost of electricity through Empire District Electric continued to spike. The budget increased a 33 percent rise over last year's cost to keep up with escalating expenses, particularly for running the water and sewer system.
The only other major anticipated increase stemmed from expenses with the city's engineer, Allgeier, Martin and Associates, and legal fees in formulating a solution for the sewer situation and reaching an agreement in the ongoing litigation with DNR. The budget included an increase of almost 14 percent, from $60,000 to $68,250.
The budget projected general fund income and expenses of $160,300. Police department costs of $80,660 rose almost entirely from the wage and benefits cost of living increase, plus a doubling in the allocation for repairs and maintenance.
Sanitation expenses of $48,000 reflected a $2,000 drop in sanitation fees, partly from clean-up week expenses falling. Street maintenance was budgeted at $67,000, reflecting a $10,000 increase in repair and maintenance expenses. Costs for running the park were budgeted at $4,700, a drop of $500 due to less supply purchases.
The budget for running the water and sewer services totaled $168,500 without the rate increase.
The push to increase sewer fees does not stem from a rise in operational costs, said Redshaw. To qualify for federal assistance, city officials have progressively increased sewer rates to reach 2 percent of the median income in town, as documented by the Federal Census. The 2 percent mark reflects what a typical family spends on sewer service. By reaching the federal benchmark, Purdy will qualify for grants and loans through the U.S. Department of Agriculture's Rural Development program, among others.
The proposed $5 increase in the minimum rate would raise the cost for using 5,000 gallons of water into sewage from $40 to $45 a month. According to the 2010 census, to qualify for federal grants, the rate must reach $51.83 for 5,000 gallons, the average household usage.
The adjustment boosted projected revenues by $1,905 per month, up $22,860 per year. Additional revenue goes into a capital improvements fund for making sewer system upgrades that will bring the city back into compliance with its sewer permit issued by the Missouri Department of Natural Resources.
Council members discussed the need for continuing the gradual rate increase. Redshaw said action boosting rates will likely take place by the end of the year.