City to Weigh Impact of Losing DUD as Water Customer

What impact will losing the DeKalb Utility District as a water customer have on the City of Smithville?
Will the city have to eventually raise water rates to its own customers because of it?
During Monday night’s meeting of the Mayor and Aldermen, City Administrator Hunter Hendrixson said a new rate study is being conducted to determine the city’s actual cost of producing water. “Through J.R. Wauford (city’s utility engineer), they have recommended a gentleman to us. He is out of Hermitage and he does water and sewer rate studies. He has been working with us, going through our data. We’re trying to figure out where we are at and where we are going. DUD is probably going to be leaving us in the next few months. They are getting ready to start up their plant. We’re trying to get a plan together as far as how that is going to impact the city. They are our biggest customer but they are also our biggest expense. This is unknown territory. Hopefully by the next meeting, I’ll have him here and he can give a report. We need to see what it’s costing us and see what we may need to do in the future as far as our water and sewer rates. Hopefully we won’t have to do anything. I just want you to know we’re working on it. The number we have (from previous water rate study) $2.67 per thousand gallons to produce water is now five or six years old. A lot has changed since then,” said Hendrixson.
City water customers currently pay $5.00 per thousand gallons of usage. Rates for customers outside the city limits are $7.50 per thousand gallons. City sewer customers pay $5.00 per thousand gallons plus the flat usage rate of $3.62. The rate the city charges the DeKalb Utility District is $2.67 per thousand gallons.
In this year’s budget, the city reduced projected revenues from the sale of water to the DUD from $765,000 for the year ended June 30, 2016 down to $400,000 for half the year 2016-17. City officials said earlier this year that such a loss of income may eventually force the city to look at ways of cutting spending or raising new revenues to make up the difference.
DeKalb Utility District is nearing completion of its own water plant but the DUD has not yet announced a launch date.