City council approves 5.5 percent rate increase for sanitary sewer use

By Charlie Warner
Argus News Editor

Sewer rates in Caledonia will be going up. To help cover about 10 percent of a massive sanitary sewer rehabilitation project, the Caledonia City Council approved a 5.5 percent increase in the monthly fixed meter charge.

According to a preliminary cost estimate summary provided by Davy Engineering, the rehab project will cost $2,138,000. The city applied for a $1,925,000  Public Facilities Authority (PFA) low interest loan through the Clean Water Revolving Fund.

If the city’s application is approved, the city will have to come up with approximately $213,000. The 5.5 percent increase in monthly fixed meter charges would help  cover that amount as well as the annual payback on the low interest loan.

The monthly fixed meter charge increase was effective as of the January usage, which isn’t billed until the second quarter of 2012.

A motion to increase the monthly fixed meter charges at approximately 5.5 percent made by Mayor Bob Burns and seconded by Councilman Paul Fisch was unanimously approved.

In other council action:

Interest versus interest

After reviewing the financial reports with City Accountant Stephanie Mann, Fisch asked if the city wouldn’t be better off paying off several smaller general obligation (GO) bonds early instead of having  more than $2 million in money market accounts.

“If we don’t need the cash flow right now, wouldn’t we be better off paying some of these off?” he said. Fisch went on to point out that many of the city’s investment accounts were earning less than two percent, while the interest the city was being charged on the GO bonds was considerably higher.

“Maybe we should look at using our cash to benefit us,” Fisch continued. “The light department money is earning so little interest. Aren’t we paying more for the GO bond interest?”

Councilman Tom Murphy said he was more inclined to continue building the electric department fund, as the city has some major electric system projects looming in the future.

No action was taken on this issue.

County collection site issue

While reviewing the financial report, Mann was asked why the Houston County collection site account was always in the red. According to the latest figures, it was running about $600 short each year.

Mann explained that the city bills each household in the city $2.60 per month and pays the county $2.50 per month per household. The deficit is due to non-payers and “snowbirds”
who aren’t getting charged when they go south for the winter.

Fisch said this was something that needed to be corrected and asked Mann to come up with a plan that would bring the account into the black.

Ambulance fund

While the council was reviewing the ambulance fund, Burns asked if the costs the city incurs in administrative duties is included in the annual budget. City Clerk/Administrator Jennifer Feely and Mann both indicated that those costs were not figured in.

Burns said that those costs needed to be shared between the city and the Rural Association. He asked Feely and Mann to come up with some concrete figures on how much time was taken by city staff   for the administrative end of operating the cooperative ambulance service.

You can contact Charlie Warner at charlie.warner@ecm-inc.com

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