Calling it a first step to shoring up the citys water fund, Iola City Council members approved a 10-percent water rate hike, effective Jan. 1.
Other steps are still to come.
Even with the rate hike, and an accompanying reduction in how much money is pulled from water reserves to support other parts of the city budget, the water fund will continue to lose money, and be bone dry by the end of 2022, City Administrator Sid Fleming said.
The 10 percent is a good compromise, Councilman Michael Middleton said, pointing to the Councils rejection earlier this year of a proposal that would have instituted a series of three rate hikes totaling 25 percent.
This is probably the best route, Middleton said. This gives us a year to get a true look at expenditures.
We need to bite the bullet and move on, Councilman Gene Myrick said. Its a starting point.
Were not tying ourselves up with three rate increases, Councilwoman Nancy Ford added.
Fleming spelled out a brief history of the water fund, which was $300,000 in the red in 2010. Since then, the city has transferred a combined $850,000 into the water fund from the wastewater, electric and gas funds, and used city sales tax revenue to pay the annual $600,000 water plant bond payment this year. (That money will eventually be repaid, Fleming promised.)
And even though the city has increased water rates in 2011, 2013, twice in 2015 and again in 2016, those have been insufficient to meet expenses.
The past transfers into the water fund have helped the cash balance, Fleming said, but we havent ever got the rate set for long-term sustainability of the fund.
Another shoe set to drop either this year or early in 2019 is a full-scale study of the citys water system to determine what sort of capital improvements are necessary in the short- and long-term. Fleming has earmarked $150,000 for such issues in 2019, then $100,000 annually thereafter. Those figures are a virtual certainty to be much too low for what is needed, he warned.
The vote to approve the water rate increase passed 6-1, with Councilman Danny Mathew opposed and Ron Ballard absent.
COUNCIL MEMBERS also:
Approved a request from Bollings Meat Market to close off a portion of the alley outside the business Oct. 18-21, to accommodate the markets annual customer-appreciation sale. The alley between Bollings and Rays Mini Mart will be affected, owner Cara Thomas said. The neighboring businesses have been notified and have no objection.
Approved a request from Marshall Barnhart to close off a small portion of Miller Road, just west of State Street from noon to 11:30 p.m. Oct. 6 for Rockfest 2018, a daylong music festival. Police Chief Warner said managers at Walmart and Russell Stover Candies have been notified and had no objections.
Approved a laundry list of requests from the Farm-City Days Committee to accommodate the annual fall festival, including allowing Ottaway Amusements carnival workers to stay overnight at Riverside Park Oct. 9-15, allowing unregistered and unlicensed golf carts on Oct. 13, approved giving a family season pass to Iola Municipal Pool as part of a prize drawing and allow staff to otherwise support the committees needs.