The Iola City Council’s approval Monday of a series of water rate increases was the latest in a yearslong effort to drum up more revenue for the water fund.
The Council voted 6-1 Monday to implement a 10% hike effective May 1, plus another 10% increase in 2021 and a 5% hike in 2022.
The goal is to get the water fund solvent enough to continue the city’s annual $689,000 bond payments for the water plant’s construction. The bond payments have been made annually since 2005, and will expire after 2025.
An article in Tuesday’s Register detailing the latest maneuver noted the Council rejected a similar proposal for a series of rate hikes in 2018.
There’s a bit more to that piece of legislative history.
In the spring of 2018, a divided Council voted, 3-3, to implement a pair of 7.5 percent rate hikes over the following two years. Because of the deadlock, Mayor Jon Wells cast the tie-breaking vote in favor of the increase. (Two Council members were absent from the meeting).
Fast forward a few weeks later, when the Council learned that the rate increase required a majority of the full Council — not just a majority of those present – for the rate hike to be legal.
Following a subsequent discussion, the Council voted, 6-2, to reject the increases.
The matter was brought back to the Council in September 2018, when they approved, 6-1, a one-time 10% increase, effective in January 2019.
The city also took other steps to keep the fund from running dry, including using capital projects funds — through proceeds from Iola’s sales tax revenues — to make its 2018 bond payment.
The Council also cut its transfers to the city’s general fund. Historically, the city has used utility reserves to supplement the general fund in order to keep the mill levy lower than it otherwise would need to be to stay in balance.
The hope, City Administrator Sid Fleming said Monday, is for the added revenues from the water rate increase to slowly resume transfers to the general fund in 2021, increasing those transfers by $50,000 increments through 2024, then transferring $200,000 annually thereafter.
IN A related matter, Council members will discuss a number of topics Monday evening during their annual strategic planning session.
City Administrator Sid Fleming will provide a few general topics, then let the Council members guide the discussion.
The Council has much on its plate, including ongoing talks regarding infrastructure improvements, including how to tackle needed improvements on U.S. 54 through town.
The Council also will likely discuss a city workforce study completed last fall by Wichita State University, and how the city should flesh out the study’s recommendations.
