Water rates in Iola will be increased to make up a glaring shortfall in the city’s water fund budget.
But in a reversal of an earlier decision, Iola City Council members declined a proposal to decrease meter charges for electricity customers, which would have balanced out the water rate hikes so utility customers would not pay more each month.
Council members were unanimous in their vote for an across-the-board 18 percent hike in water rates, the first for Iolans since 2005.
That means the meter charge for water customers goes from $15 to $17.70 a month, while the cost per unit, or 1,000 cubic gallons, goes from $2.66 to $3.14. Wholesale rates for industrial customers or other municipalities or water districts will increase to $3.04 or $2.56 per unit, depending on the amount of water they typically consume each month.
To illustrate, a family of four whose water bill stands this month at $35 will spend about $41 with the new rate.
If water usage remains the same — which is not guaranteed — revenues will increase about $275,000, City Administrator Carl Slaugh said.
Since 2007, the city’s annual water fund shortfall has been about $238,000.
BUT SOME council members weren’t as eager to see electric fund revenues cut.
As per the council’s split vote Sept. 12, Slaugh devised a proposal to cut electric revenues about $271,000 annually by paring by 80 percent each customer’s monthly meter charge.
With that proposal, however, Slaugh noted its assumed impact on the city’s budget.
“We’re gonna be hit with some added expenses with the hospital construction, we’re gonna miss some revenue that’s not going to be there for roads. We’ve â¨become accustomed to subsidizing our general fund from utilities,” Slaugh said. “I just see a lot of issues with lowering electric rates. It’s a net wash. We might as well have just left water rates where they were. My concern is how to deal with some of these projected increases at the same time we’ll be lowering our revenue by what is about 6 mills.”
“One way to deal with that, Carl, would be to reduce spending,” Councilman Ken Rowe replied.
Slaugh said he would need to look more in depth at each of the city’s departments and services offered to determine where cuts could be made. He warned that some would be “painful” in terms of reduced services to Iolans.
Rowe and Kendall Callahan both spoke out in favor of cutting the meter charges.
“Everyone knew water rates had to be raised,” Councilman Jim Kilby said. “Lowering the electric (rates) scares me, and this is why: We have gone through many ice storms and have really taken down lines and new lines have been built. I just think crippling one (fund) to minimize the effect on citizens who have gotten used to us being there with electricity wihen they need it and new businesses being there to accept our electricity when they need it, is not the time to cripple our electric (fund). I say, leave our rates alone on electricity.”
Beverly Franklin suggested lowering electric rates for about six months before reviewing rates again.
Such a plan was possible, Slaugh said, through city ordinances.
“I don’t think we can afford to hurt the electric fund,” Councilman Don Becker said. “We don’t know how much extra we’re really going to have in water revenues. To cripple our electric fund would be irresponsible.”
Councilman Joel Wicoff said his constituents were thankful for the services they received from Iola.
“I’m very reluctant to cut the source of income for many of our services,” Wicoff said. “I hate to take the money out of utilities and waste that. It’s best to leave it the way it is and not confuse anybody.”
Callahan urged the council members to OK the electric rate cut.
“We’re not going to cripple it six months,” Callahan said. “We’re talking about $200,000 in a year. Six months would be close to $100,000. That would give us time to review areas where we could make some cuts and save some money.”
Callahan also noted the city could look at ways to increase production.
“Have we looked at every service we provide, then put a cost to it, and say, is there a better way to do this?” Callahan asked. “We’ve not done this.”
Councilman Steve French pointed to streets in need of repairs that may not be possible for the time being because the city agreed to dedicate a portion of its sales tax revenues to the county to aid in construction of a new hospital. Those revenues were in addition to the quarter-cent sales tax voters approved countywide last November.
“When I see these things, it’s hard for me to cut where those funds might come from,” French said. “I do support that we look aggressively at cutting where we can and perhaps adjusting utilities” later on.
The vote to cut the meter charge failed 5-3, with Rowe, Callahan and Franklin in favor. Becker, Wicoff, French, Kilby and Scott Stewart were opposed.
