Florala hikes water rates

Published 11:59 pm Monday, September 28, 2009

By a 3-2 vote Monday, the Florala Utilities Board approved a nearly $1.4 million “tentative” budget Monday that included an estimated $11 increase per month per customer.

Utilities Board manager Lynn Hughes said the additional $90,000 in revenue would be used to “replenish the board’s project construction fund.”

Two board members — Mayor Robert Williamson and John Stone — were adamantly opposed to the increase. After a lengthy discussion, three board members — Chairman Marvin Williford, Horace Bell and Marion Causey — agreed they would adopt the budget as presented as a “tentative budget,” with review at the end of December for a possible rate increase.

In recent months, the board has committed funding for three upcoming projects — an out-of-pocket expense of $460,000 for the “Main Street project,” which would replace the water and sewer pipes down Fifth Avenue from the water tower north to the Mastar Building; $88,000 for a 20 percent grant match for sewer rehab; and another $80,000 as another 20 percent match for a FEMA hazard mitigation grant which would raise two sewer lift stations above flood level.

The board has not yet been notified if it has been approved for funding on the two grant projects, but a total of $687,000 is set aside in construction accounts for the projects, Hughes said.

“When that money is spent, it will deplete our construction funds totally,” she said. “In order for us to retain those funds from year to year, so that we have money to use as matching funds for projects, we have to increase water rates.”

Hughes said the cost of natural gas has increased, and a change in the way the board is billed for its purchases of natural gas has put an additional heavy financial burden on the board.

“Now we have to pay ‘full capacity rate’ instead of what is actually used,” she said. “We hope that will soon change, but there is an additional $400,000 included in this budget because of those gas purchases.”

Hughes said there has been no increase in water rates in the last 16 years, but the amounts in this year’s budget include an approximate $11 per month per customer increase.

“That’s preliminary,” she said. “It could average out to $9 for residential customers and $15 for commercial accounts. We will have to see.

“If we can get the way we are charged for gas changed, that would go a long way in helping with this budget,” she said. “Our attorney is working on that, but what you have in front of you today is the worst-case scenario. We don’t want it to happen, but I don’t want you to come back and say, ‘How did this happen? How are we here?’”