COLUMBIA, SC (WIS) - Columbia City Council voted 6 to 1 Tuesday night in favor of propose rate changes for city water and sewer customers.
The proposal makes two major changes. The first being a significant drop in rates for larger, more commercial-like customers, and the second being an eight percent increase for all customers.
City officials say rates increased last year after consideration to recommendations made in a 2011 rate study. City officials say there was about an eight percent increase last year on most customer's volumetric rate (Volumetric rate is based on customer usage).
Also last year, customers who are serviced by meters one inch and larger saw a significant hike in what's called their base rate factor. (City officials say the base rate factor is always constant and is dependent on meter size.) After a re-assessment, city officials say they determined the base rate increase was too high.
The latest proposal would cut the recent base rate increase in half for larger customers, but maintain another increase for all customers when it comes to usage.
"Your average residential in City customer will see about a $2.60 increase," said Joey Jaco, the City's Director of Utilities. "It's roughly an eight percent increase in your volumetric rate. It's going to be an increase, but it's not going be a big increase on your average water user."
According to Jaco, 89 percent of its customers are serviced by a meter that's smaller than one inch. Eleven percent of its customers have a larger meter.
If city officials stick to the study recommendation, Jaco says customers would likely see an increase each year to the current rates.
Ultimately city officials say the increases are to help the utilities department fund the $100 million Capital Improvement Project to bring the system up to date.
Jaco says with the decrease in the base rate factor for larger customers, the department will see a $5 million dollar cut to its budget, but he believes with the steady changes to rates they will still be able to secure funds from the bond market to fund the capital improvement project.
The public hearing on the changes was held last week, as well as the preliminary vote. Council voted 5 to 1 to approve the changes in the first vote. Councilman Moe Baddourah voted against the changes.
"I opposed raising the rate for residential customers unless such a rate increase is tied to reduction in the amount of money we transfer from the fund for other uses. We shouldn't raise people's rates until we can be sure a rate increase is needed and existing revenue is being spent well."
The utilities department says each year three to four percent of the water and sewer revenue is transferred to the city's General Fund.
Jaco says the vote was scheduled for tonight in order for the changes to take effect on May 1st. He adds rate changes would likely still have happened in July, but they desired to make the changes sooner for larger customers.
According to city officials, the new rates would be effective until July 2014.