CONNEAUT — Debt accumulated from projects decades-old is the main reason Conneaut sewer customers are facing a double-digit rate hike in 2010, City Council learned at Monday’s work session.
Debt well into six figures is “crippling” the sewer fund, one of two so-called enterprise funds that are solely self-supported, said Finance Director John Williams. “Debt service is growing and getting to an unmanageable rate.”
A rate hike is inevitable, Williams said.
“I see no way to balance (the fund) without a rate increase,” he said.
The city has failed to enact sufficient rate increases at necessary levels to keep the fund in hand, officials said. Revenue in the fund has lagged behind expenses 10 of the past 15 years, and Williams said the fund’s collections so far this year have been $151,000 less than anticipated.
“It seems the city has just been reacting, just to get by,” said Ward 4 Councilman Tony “Dino” Julio.
Williams discussed the sewer fund at length Monday because of the reaction the proposed sewer hike has generated in the community. A rate increase around 19 to 20 percent is included in the proposed 2010 budget crafted by Williams and City Manager Robert Schaumleffel Jr. A rate hike of that size would cost a customer on the low end of the user scale an extra $3 a month, Williams said. An average customer could expect a jump between $3 to $4 a month, he said.
The city is still paying for sewer-related projects completed as far back as 1971, Williams said. The good news is that the city is nearly finished paying off those projects, freeing up money for use elsewhere. Schaumleffel is interested in putting the money into a special capital improvement fund, Williams said.
Also, administrators are optimistic an automatic meter reading program set to launch next year will boost revenues by keeping closer tabs on water use. Customers’ sewer fees are pegged to their water usage.
The water fund, Conneaut’s other enterprise fund, is in good shape heading into 2010, Williams said.
In other business, council is poised to amend the streetlighting fee enacted in the spring. The new version would extend the fee to include every unit in a multifamily dwelling. However, residents who live a distance away from a light could file for an exemption.
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