PATTERSON — Water customers here will see the first step of a phased-in rate increase soon.
Customers also will see increases in general fees, deposits and new water meter installation costs that will not be phased in over time.
Because the water rate increases must be done by ordinance, customers will not see the first increase until the April bill, which will be received in May.
Currently both residential and commercial customers pay $10 for the first 3,000 gallons of water used and $5 for every 1,000 gallons used after.
Rates for residential customers in town eventually will be a $15 flat rate for up to 2,000 gallons and $5 per each 1,000 gallons used thereafter. The increase on the flat rate portion will be phased-in over three years. In 2012, the flat rate will be $11.66, while on Jan. 1, 2013, the rate increases to $13.33 and then to $15 in 2014.
As of Jan. 1, 2015, a consumer price index increase of 2 percent annually will be added to all flat water rates to keep pace with inflation.
Out-of-town residential customers will see an increase to $17.50 flat rate for up to 2,000 gallons and $5.25 per each 1,000 gallons used thereafter. Their steps are $12.50 in 2012, $15 in 2013 and $17.50 in 2014.
The increased amount for citizens and businesses outside city limits is due to different tax structures that those inside city limits pay but those outside the city are not bound by.
Commercial customers in town will pay $30 for up to 4,000 gallons and $7.50 per each 1,000 gallons used thereafter. Their steps are $16.66 in 2012, $23.33 in 2013 and $30 in 2014.
Out-of-town commercial customers will see an increase to $35 flat rate for up to 2,000 gallons and $8 per each 1,000 gallons used thereafter. Steps for this group are $18.33 in 2012, $26.66 in 2013 and $35 in 2014.
The city will hold a public hearing on the rate increases at the February city council meeting and consider adoption at the March meeting, according to Mayor Rodney Grogan. Should the ordinance be adopted, it must lay over for 20 days before becoming effective as required by the city’s charter.
Increases are required to gain complete funding for water plant improvements. The city needs to secure a $5 million loan from the U.S. Department of Agriculture. In order to accommodate the payment of the USDA loan and operating expenses, the city needs to generate approximately $1.2 million annually through user fees — essentially, from residential and commercial water bills. The only way to do that is to restructure and increase rates, city leaders said.
While the current water plant does produce quality water, the infrastructure is nearing 70 years old. Residents passed a 12.41-mill property tax April 30 to pay for $5 million in bank loans for the plant replacement. However, engineers currently estimate the project will cost between $8 million and $9.8 million.
As for user fees, the city increased those effective today as they were approved by resolution during Tuesday’s meeting.
Stuck at the old rates for 40 years, the city changed the structure to include:
—NSF fees from $25 to $35.
—Reconnections from $10 to $35.
—Transfers from $10 to $30.
—Connections from $10 to $25.
—After hour fees from $12.50 to $50.
—Pressure check $25 to $40.
—Water meter deposits from $150 to $175.
—In-town water new meter installations from $225 to $500.
—Out-of-town new water meter installations from $250 to $600.
The fee increases passed 4-1 with Councilman Sandra Turner casting the lone dissenting vote, citing the large increases in meter installations.
Finally, the state requires all businesses to install backflow preventers and to have them tested annually, a law that has been on the books since 1970.
The cost for installation and testing is borne by the business but the work must be reported to the city. Those not in compliance with either portion of the law have 90 days to get the work done or their water will be shut off, the council decided.