Stop us if youve heard this before
Iola officials, in an attempt to bolster the citys water fund, are considering a water rate increase, which would be the citys sixth since 2011.
City Administrator Sid Fleming spelled out the issue, the most vexing one for the city since the new water plant was built in 2005: the city has troubles meeting its expenses when accounting for a $600,000 bond payment.
That issue will be eliminated in 2025 (maybe) when the water plant is paid off, but for now, balancing the budget has been a Sisyphean task, Fleming said.
He estimated revenue will fall about $288,000 short of expenditures in 2018, and as much as $800,000 short in 2019. That issue is exacerbated because Iola had only $98,000 in carry-over funds from 2017, much less than the $800,000 benchmark.
Because three-quarters of the water fund budget is in fixed costs water plant payment, chemicals and personnel costs finding places to cut expenses is kind of difficult, Fleming said.
WATER RATES stayed flat from 2005 until 2011 to the citys disadvantage, Mayor Jon Wells noted and its been a struggle to keep up ever since. We got a brand new water plant, and we didnt do anything to pay for it.
The Council approved water rate increases of about 10 each percent in 2011 and 2012, with smaller rate hikes of about 3 percent in 2014, 2015 and 2016, Fleming noted.
Fleming tossed out two options for the Council to consider: Approve increases over the next three years of 20 percent, 7.5 percent and 5 percent, respectively; or approve smaller rate increases of 10 percent, 10 percent and 5 percent over the same period.
The larger rate increase would allow council members to make a bond payment from the water fund. Otherwise, the money would come out of citys Capital Projects Fund, typically allocated for streets and alleyways.
Wed borrow from ourselves, Fleming said. The concern there is, if you do that, will you get it repaid? We need to make sure were diligent in how we get it repaid.
Flemings option would be to have the city begin putting money back into the Capital Projects Fund in 2021, and continue those repayments through 2026.
THE COUNCILS reception to Flemings presentation was decidedly mixed. Councilwoman Nancy Ford asked Fleming to bring back more specific numbers, noting a 20-percent rate hike doesnt take into account meter charges.
If somebodys looking at this, theyre not going to pay, say 10 percent or 20 percent more, until we plug in the numbers, Ford said. What will this mean to my wallet? Thats what people really want to know.
Mayor Jon Wells asked for rate comparisons for neighboring communities, to give perspective.
