The council had voted to stop charging the $5 per household per month at a meeting held Nov. 7 with a vote of four to two. Council members Gene Zick and Russell Jones voted to keep the charge while members Mark Stratton, Lanny McPherson, Jack Whipple and Chuck Phillips voted to drop it.
Zick had gone on record saying the city needed a little time to figure out why it is experiencing a large shortfall in the water/sewer department and what needs to be done to increase cash flow, which has been scarce for years in that area of city finances. That was the reasoning behind placing the surcharge last December. When council members enacted the surcharge last year, it was their intention to drop it after a year.
The recent shortfall is believed to be coming from the replacement of 2,800 meters within the city. Council thought by replacing the meters it would generate additional revenue for the city’s water/sewer department, but they are in fact losing approximately $48,000 per month in anticipated revenue since the meters were replaced four months ago.
After the initial vote to drop the charge on Nov. 7, Zick wrote a memo to all his fellow council members, explaining his thoughts and saying he felt the decision to drop the charge was premature. The council apparently listened and called a special meeting Tuesday to discuss it. A five to one vote took place at that meeting reversing the decision made a week earlier.
Councilman Lanny McPherson was the lone vote not to change the decision but it wasn’t just to save the citizens from paying. He said the surcharge is just a band-aid approach and he believes a rate increase is probably going to have to be implemented.
The rest of the council agreed verbally that a rate increase may be the answer. A rate study was part of the original motion made Nov. 7 and didn’t change with the reversal. The council believes a study needs to be done to inform them better of how much they would need to go up.
A study was conducted in April 2005 by the Kentucky Rural Water Association, which recommended raising the sewer rates at that time. The council decided to tag on the $5 surcharge instead. Unfortunately, according to the council, now there may be no alternative.
It looks as though it may not just affect the sewer rates as Logan Todd Regional Water Commission (LTRWC) may be raising its rates for water the first of the year. It has been said that LTRWC may increase rates to its water customers as soon as January. If that happens, said Zick, Russellville will have to pass that on to the customer as well.
According to Mayor Shirlee Yassney, the city hasn’t seen a rate increase since 2002. She said taking the surcharge off at this time is adding insult to injury and the city is already hurting in that department. The $5 surcharge generates between $15,000 and $16,000 a month.
Councilman McPherson said additional revenue needs to be boosted to the water/sewer department if the city wants to grow. He said right now if the city wants to expand they would have to borrow the money. “If we borrow more money we would need more revenue,” said McPherson., “Right now we are fairly well but we don’t have any big prospects coming into Russellville. Short term is not to set money aside, which is what they have done in the past. The visionary thing to do is start setting money aside so when we want to do projects, we don’t have to go to the bank and borrow a million dollars. Until we go that direction we’re going to be running this city just like they did 20 years ago where they ran month to month and there was nothing set aside for future growth.”
Councilman Stratton said this isn’t something that has just jumped up and “bit the city” and has been going on before the new meters. “I don’t know what is causing all this but sometime we have to figure out if a rate increase is what we have to do.”
Assistant Utilities Director Wayne Thomas said one of the problems is that anytime the city has received a recommendation to raise the rates, the increase has always been less than recommended. “It’s always been less and that’s why there has never been adequate funding to put into projects and that is where the shortfalls are.”
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