The City of Smithville will have to raise water rates by 45% over the next five years once it loses its largest customer, the DeKalb Utility District. The DUD has built its own treatment plant and plans to start producing water soon.
In addition, Smithville residents will be hit with a sewer rate hike of 40% over the next four years in order to fund depreciation due to renovations underway at the waste water treatment plant.
A 45% hike would increase customers water rates from $5.00 per thousand gallons to $7.69 per thousand over five years. A 40% increase in sewer rates over four years would result in an increase from the current rate of $5.00 per thousand gallons to $7.33 per thousand.
Greg Davenport of the J.R. Wauford Engineering Company and Buddy Petty of Rate Studies Incorporated of Nashville shared with the mayor and aldermen in January the results of the latest water and sewer rate study.
“Everybody knows a big water rate increase is coming. You cannot lose your largest water customer by far without a massive increase. I think you are selling more water to them (DUD) than you use inside the city. We also looked at your sewer system,” said Davenport.
(BELOW IS A VIDEO CLIP OF BUDDY PETTY ADDRESSING MAYOR AND ALDERMEN IN JANUARY)
During Monday night’s meeting (April 3), City Administrator Hunter Hendrixson gave copies of Petty’s detailed report to each alderman and the mayor.
Hendrixson suggested a workshop be set up for Petty to again explain the numbers before the city moves forward on a plan to address the concerns
“This is the final report from Mr. Buddy Petty who was here a few months ago who we had a workshop with. We couldn’t get them here tonight to go over this but I told them I would pass it out to you. There is quite a bit to look at here. What we’re hoping to do is set up a another workshop in the next few weeks and have Buddy sit down here and go through the numbers and explain it to you. There is a lot in here (report). A lot of information, charts, graphs, etc. It shows where we are going over the next three to four years without the DeKalb Utility District. They (DUD) are still hooked on to the City of Smithville. They haven’t yet converted over to their plant 100% but I think they are in the process of it. They are still a City of Smithville customer. Unfortunately over the next three to four years we are probably going to have to raise our rates to some extent to make up for the loss of revenue. It (report) shows the percentage of increase needed to keep the water and sewer utility in the black. We can’t go two years in a row operating in the red otherwise the state will determine that for us,” said Hendrixson.