Iola City Council members discussed the best strategy to closing what has become an ongoing budget gap in the citys water department.
As it stands, Iola projects to spend about $280,000 more to treat and deliver water to its residents in 2018 than it will recoup in revenue, City Administrator Sid Fleming said.
While no vote was taken Monday, the consensus among the Council members was to institute rate and meter fee increases of 7.5 or 10 percent over each of the next two or three years. Additionally, the Council favored making this years $600,000 water plant bond payment with Capital Projects Fund monies instead of using revenues from the water fund.
Fleming will come back to the Councils next meeting with a rate analysis to show what 7.5 percent and 10 percent rate increases would mean for residential and commercial water customers.
AT THE dawn of Mondays discussion, Mayor Jon Wells spelled out the citys dilemma.
Since the water plant opened its doors in 2005, the city has increased water rates on six different occasions, resulting in about $420,000 in added revenue.
However, that $420,000 still pales in comparison to the $600,000 bond payments.
The issue is, we did this to ourselves, Councilwoman Nancy Ford agreed. They didnt raise rates enough to pay for this water plant. Now were stuck in a well.
Were balancing somebody elses checkbook, Councilman Ron Ballard added.
FLEMING offered up different scenarios for what 10- and 20-percent rate hikes would mean.
Councilman Aaron Franklin noted such a 20-percent hike would mean paying $17 more a month for a large family.
I cant vote for a $17 a month raise, Franklin said. We need to try to find somewhere else to compromise.
Ballard suggested the city refrain from transferring $200,000 from the water fund to the citys General Fund as has been done in years past; or to find other places in the budget to cut, including equipment reserve funds.
However, that still would not cover the $280,000 budget gap, Fleming replied. And then, youre going to have a budget gap in the General Fund. Youre probably talking personnel (cuts) then.
The question isnt if the rates have to go up, Wells said. Its what percentage.
