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City of Bridgeport narrows water rate options

By Racey Burden | Published Wednesday, March 7, 2018
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Bridgeport City Council held a workshop on water/wastewater rates Tuesday.

The city’s water/wastewater utility fund has operated at a deficit for eight of the last 11 years. Last month, Schneider Engineering presented three rate increase options to the council, each designed to get the fund out of debt and yield enough revenue for maintenance.

The council narrowed the options down to two at their last meeting. The first option includes the first 3,000 gallons in the variable rate scale, increases the base charge by $10 and raises water rates by 5 percent every year for 10 years. Schneider Engineering recommended this option.

The other option includes the first 3,000 gallons in the variable rate scale, increases water rates by 12 percent each year for 10 years and increases the base rate by 0.5 percent.

Schneider Engineering also recommended the city increase the wastewater rate by $5 for each rate class, and then increase the rate by 5 percent annually.

The water/wastewater fund owes $1.2 million to other city funds, which the city would like to repay over the course of 10 years, in addition to raising $100,000 per year for maintenance.

“We’re $1.2 million in the hole that we need to pay back. We know that we need to raise capital to pay for urgent repairs, as well as for the future to maintain the plant adequately,” City Manager Jesica McEachern said. “We know that one of our big problems that we’ve been battling for years every year is poor water quality during the fall and summer months. So just a reminder, built into these proposed rates is additional capital fundraising in order to address specifically that issue through the construction of a pre-treatment basin.”

McEachern said once the water/wastewater utility fund pays off its debts to the other city funds, that money can be used for capital improvement projects like street work or repairing the law enforcement building, should the council choose to spend it in that way.

“When this is done, whatever option we pick, is that going to make all the funds right?” council member Jimmy Meyers asked. “Everybody is paid off?”

McEachern said that the $1.2 million would be paid, but the city still has debt in the airport fund and in bonds, which are separate issues.

“Water, sewer, electric will be all be corrected,” McEachern said.

Mayor Randy Singleton asked McEachern to explain to the council what would happen if the city doesn’t raise its water and wastewater rates.

“If we don’t do any of this, we will continue to operate in a deficit year after year,” McEachern said. “Eventually [according to projections] the deficit for one year becomes a negative $1.3 million. Add that on to what we’re doing right now with negative $1.2 million, and that means at some point we’re going to be in the hole for more than $3 million.”

Calling the water fund “bankrupt,” Singleton told the council “we have to stop the leak.”

Council member Kevin Lopez asked if they could raise the rates just enough to pay for maintenance the first year, then reconsider raising them enough to pay off the fund’s debt at a later date.

“When we look at the history of the water and wastewater fund and we look at how many years it’s operated in the deficit, we looked at when the council in the past considered doing increases,” McEachern said. “What we saw was that constant action to push that decision down the road. ‘We’ll take care of it later, we’ll take care of it later.’ And it’s built and built and built.

“The longer we don’t take care of our responsibility to pay that money back, that is other things that are not going to be able to be taken care of because they’ve lent out their money and they don’t have any.”

Lopez then asked if Bridgeport could create a water utility district, a separate taxing entity. Decatur’s water is in a water utility district. McEachern said that would have to be approved by voters, and that Bridgeport’s tax evaluation is 50 percent of Decatur’s.

“We shouldn’t even have Decatur on [the water rate comparison chart],” Meyers interjected. “We cannot compete with them in anything, football or anything else. They’ve got more money, they’ve got more taxation. I’m sorry, but they do.”

The council decided to move on from the water utility district option. Taking an informal poll of the council members, all those present – Lopez, Meyers and Billy Fred Walker – said they’d prefer the first rate option, which increases the base charge by $10 and raises water rates by 5 percent every year. They did not take a vote because the discussion was a workshop.

“I really think there will be years when you don’t have to pass an increase,” McEachern said. “This model [of rate increases] looks at a worst case scenario.”

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