Hammond reviews water rate increase

• By DEBRA LEMOINE
• Advocate Florida parishes bureau
• Published: Jul 13, 2008 - UPDATED: 12:05 a.m.

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HAMMOND — The city of Hammond is considering raising its water and sewer rates by 5 percent, a proposal that if approved, would become the city utility’s second rate hike in two years.

The City Council is expected to hold a public hearing and vote on the rate increase plan at 5:30 p.m. Tuesday in the council chambers, 312 E. Charles St.

For residents inside the city limits, the rate would rise from $3.78 to $3.96 per 1,000 gallons used. City officials have said that the average residential customer uses 6,000 gallons a month, so that bill would go from $27.68 to $28.76, including a $5 user fee.

The higher rates come as the city has spent $7.5 million to build a new sewer treatment plant and millions more replacing aging infrastructure. However, the city is still behind on the maintenance and repairs to its system, Mayor Mayson Foster said.

“Our goal is to be able to meet payroll and budget,” Foster said. “Our second goal is to be able to catch up on some of those maintenance projects. And, we want to be able to do some long-term maintenance.”

The city plans to spend $453,000 on sewer maintenance this fiscal year, according to the 2008-09 budget the City Council adopted in June. However, another $14.6 million in maintenance projects await funding in the city’s five-year capital improvements plan.

The backlog includes $9 million for an overhaul of the city’s 81 miles of aging sewer lines, some of which date back to the 1920s.

In February 2006, the City Council slashed its water and sewer rates from $3.77 per 1,000 gallons used to $3.56 when the utility was making money.

“In hindsight, we should not have reduced; we should have held the rates,” Foster said. “At that time, the thinking was we were doing something positive for the residents of the city. It came back to bite us.”

That rate reduction, in part, led to a $497,803 operating deficit for the water and sewer utility in the 2006-07 fiscal year, according to the city’s annual audit. The deficit was covered by money in other city funds.

Foster also noted that the expenses of running all the city departments are rising, in particular from higher energy costs and from the pay raises given to all city employees during the past couple of years.

In response to the utility’s deficit, the City Council raised its water and sewer rates from $3.56 to $3.78 per 1,000 gallons used and added a $5 residential user fee and a $10 commercial user fee.

The revenues collected in the 2007-08 fiscal year went to repaying the city budget funds from which the Water and Sewer Department borrowed, Foster said.