Dateline: December 18, 2008

City still grappling with finances

By Roger Estlack, Clarendon Enterprise

The City of Clarendon is looking at amending water and sewer rates as it continues to grapple with a troubled financial situation.

Mayor Chris Ford said this week that he sees no alternative but to approve the rate amendment sought by City Administrator John Webb that would increase the cost for those who consume the most water.

“I think we will pass it when we meet in January,” Ford said. “I don’t see how we can do anything else. We cannot operate at a deficit.”

Ford said the city has already made cuts where it can but that “$500 here and $1,000 over there” will not solve the city’s problem but adjusting the rates will.

“We’re just going to have to take a hickey for the next couple of years, and then we’ll be in better shape,” the mayor said.

At issue is the more than $132,000 the city had to take out of reserves to meet payroll and expenses this past summer coupled with its obligation to provide an estimated $150,000 in the next few months to match a grant to replace the 1920s era water tower on the west side of town.

During last week’s city meeting, Webb reviewed his proposal to amend water rates. Currently, residential accounts pay a base rate of $22.40 for up to 5,000 gallons, $2.12 per additional thousand gallons up to 10,000, and $2.32 per thousand gallons over 10,000. Commercial accounts pay a base rate of $26.18 plus the same usage fees.

Webb’s proposal would maintain the base rates but reduce the 5,000-gallon minimum to 2,000 gallons and set a usage rate of $2.25 per thousand gallons over the minimum.

Webb said leaving the rates unchanged would leave the city with a projected $106,698.65 deficit by the end of the fiscal year next September. The proposed rate amendment would produce a surplus of $55,301.35.

The administrator told the Board of Aldermen that the city is currently losing money every month and that the city’s reserves have been dangerously depleted.

“If we have a natural disaster, I’m not sure we could even buy water for the residents,” Webb said. “We really should have six months of reserves, but that would require $647,000.”

City officials are also dealing with another problem that was discovered this fall. Some commercial accounts were being charged at a significantly lower rate than they should have. The result was that when they were brought up to the correct rate, many businesses saw their city bills increase by about $20 per month.

Webb’s proposal calls for rolling the commercial sewer base rate from $36 down to $25 and instituting a consumption rate based on average water consumption in January, February, and March.

The administrator said the new rates would be based on usage and said there would be no more “special” accounts.

“Bigger consumption users ought to pick up most of the tab,” Webb said. “We’re also getting back to being consistent, and I think that’s what we want.”

Aldermen disagreed about approving the amended rates, although most agreed they may have no choice.

“The people are going to be mad,” Alderman Terry Noble said. “I’m sure not happy with it. We had board members (in the past) sitting  on this board that should have caught some of this and didn’t. We can’t do anything about the past though.”

Aldermen Ann Huey and Tommy Hill expressed concerns about changing the rates so soon after raising base rates this fall. Alderman Kyle Davis also said he had heard a lot of complaints from businesses about their rates and could not vote for the amendment.

Hill said he wanted the board to have a workshop to look at all revenue and expenses, but Noble said the city had already done that in budget workshops this summer.

Huey said she didn’t like the idea of raising rates but understood it may be the city’s only option.

“You’re saying this plan is the only way to get us out of the red?” she asked Webb.

“Yes,” he replied.

Webb also said he hoped the base rates could be reduced next fall when the city is back in the black.

The board voted 3-1 to table the issue until the January 13 meeting. Alderman Noble opposed.

In other city business, the board formally appointed Alderman Chris Ford to succeed Mark White as Mayor, tapped Alderman Ann Huey as the city’s new Mayor Pro-tem, and named Will Thompson to fill the remainder of Ford’s term as alderman.

The city also re-appointed two members of the Clarendon Economic Development Corp. Board – Bill Stavenhagen and Roger Estlack, and selected two aldermen to serve on the CEDC Board. Aldermen Ann Huey and Terry Noble will take the seats formerly held by Janice Knorpp and Mark White.