Rome’s water and sewer committee is not recommending a rate hike for 2018, but a new report calls for increases in the coming years.
The department — which is funded by customers, not property taxes — was on stable financial footing as of the end of August, Finance Director Sherri Shore said Wednesday. But a 10-year “revenue sufficiency analysis” by consultant William Zieburtz with Stantec takes into account future needs.
“You’re running large and complex operations that are vital to this community,” Zieburtz reminded the committee.
A presentation is scheduled for the full Rome City Commission caucus on Oct. 23.
Stantec analyzes revenue and spending projections for the utility every two years and the board uses the calculations to set fees — although they don’t always follow the recommendations. The last rate hike came in the middle of 2016.
The model Zieburtz presented Wednesday calls for 2.5-percent increases on water and sewer fees beginning in 2019 and running through 2027. It factors in projected operating expenses, debt-service and capital improvement projects.
City Commissioner Craig McDaniel, who chairs the committee, closely questioned Zieburtz and city utility officials on a number of elements in the report.
“The average person looks at a 2.5 percent increase and wonders why. We want to be able to explain,” McDaniel said.
Rome Public Services Manager Kirk Milam said some spending can be deferred to stave off rate hikes — but others are not up for debate.
The systems each have a minimum operating cost, regardless of the number of customers, and scheduled annual interest payments on debt. There’s also the expense to maintain or replace parts of the aging systems, Milam said, and upgrades to meet new treatment standards set by the state and federal governments.
“The model limits the number of variables we can modulate,” said Water and Sewer Director Mike Hackett.
Ultrafiltration is a prime example, he said. Utilities have already been advised of new limits coming in 2019 on the presence of PFCs, perfluorinated compounds used in manufacturing items such as non-stick cooking vessels and stain-resistant carpeting. Limits on other potentially dangerous chemicals also are under consideration.
There’s $500,000 budgeted in 2020 toward the required equipment and supplies, with another $2 million in spending expected in 2021.
“If the state delays implementation, we can back it out,” Milam said. “But if they move it up, we have to move up our project.”
The Stantec model does scale back the department’s long-range improvement plan to 60 percent in 2018, 40 percent in 2019, 60 percent in 2020 and 80 percent in 2021. That lowers a projected $80 million in spending to about $60 million.
But Hackett said too much belt-tightening could lead to bigger problems in the future.
“The value of water is rarely understood when it’s always there, always plentiful. It takes losing it to really appreciate it,” he said.