Sewer rates to increase
later this year
At their January 3 meeting, the Caledonia Board of Aldermen discussed the Cal-Kolola Road sewer project and took action to raise sewer rates later this year.
Town Engineer Stanley Spradling was on hand to present bid tabulations for the Cal-Kolola Road sewer project as well as to discuss the need for a sewer rate increase. The Cal-Kolola Road project was first on the agenda; it is extending a sewer line out to Cal-Kolola Road and installing a pumping station behind the Sack and Save Grocery Store.
The town has received a $100,000 grant from the state to extend the sewer line, but the grant is not sufficient to cover the entire cost of the project; the lowest bid, submitted by Perma Corp., was for $122,107.
“The board will need to decide whether to construct the whole project,” Spradling said. “We’ve been working on this project for a long time, since 2007. At that time the state was giving away $150,000, which we thought would cover it. Since then they’ve cut the grant back to $100,000. We tried to design using gravity sewer only, which would have saved a lot of money, but we were unable to do it with gravity alone. So we put in one pumping station and we’re doing as much with gravity as we can. The important thing here is that it gives you customers inside the city the opportunity get on sewer once that pump station is constructed.”
“How far will the $100,000 take us?” asked Alderman Quinn Parham.
“It will get us across the road and set the manholes,” Spradling said. “It’ll get the whole pump station built, and that’ll be it.”
Although the project is only going to take in the grocery store and one household initially, Spradling encouraged the board to think of the future.
“This pump station is not just for a couple of customers,” he said. “This is a long-term investment. It’s not just the one little group of customers here. You also have to remember you’re under an order from the Department of Environmental Quality to run a sewer line to the river. The more sewer customers you have, the more money you’ll have to offset the cost on that.”
[The DEQ has told the town that its current sewer lagoon is insufficient to meet new, stricter emissions controls. The town currently plans to discharge into a nearby creek, a project that will be discussed in more depth below. – Brian Jones] “How much more is [the project] going to take?” asked Mayor George Gerhart.
“If you do everything, about $25,000,” Spradling said.
“I’d say $25,000 to $30,000 if we do everything we need to do, like put in the fence and everything,” said Water Superintendent Benny Coleman.
“Well you don’t want to do without a fence, do you?” Gerhart asked.
“You prefer not,” Spradling said. “You’re going to have to build one at some point, but it’s not required to have service to the customer.”
“It’s strictly for the protection of your investment,” Coleman said.
“How many customers is this? Is this just the grocery store?” Parham asked.
“It’s the grocery store and the house across the street,” Spradling replied.
“What’s their sewer bill going to be?” Gerhart asked.
“The same as anything else you set in town,” Spradling said.
“But we’re looking at the future,” said Alderwoman Brenda Willis. “We’re not doing it just for those two customers.”
“The big part of this is strictly for the pumping station,” Spradling said. “You’re getting that pumping station out there.
“Unfortunately Caledonia just isn’t eligible for very many grants,” Spradling added. “That’s been your problem for years.” [Many grant programs – for example, the Community Development Block Grant program – require the affected population to include low to moderate income citizens or have population requirements that the town does not meet. – Brian Jones] “Before that grocery store was out there, you remember where our sales tax was,” Willis said. “Look where it is now.”
“I’d rather see us not cut anything on this,” Gerhart said. “We’ve got money in reserve. We’ve got five accounts up there with public money. I recommend we give the bid to Perma and use the town’s money to go ahead and get it done. Let’s get it over with. We’re not just picking up two customers.”
Willis made a motion to proceed and was seconded by Darnell.
Parham, however, still had some questions.
“What bothers me is you’ve got so few customers and right now the sewer rates are only $6.60,” Parham said. “There’s the potential it could go up. I know that. But it doesn’t seem we’re going to get our money back very quickly when we’re spending $30,000 just to bring in three customers.”
“We’re not just doing that,” Willis said.
“I would be willing to go as far as the $100,000 and then see if we can get grant money to finish it off,” Parham said. “I don’t see spending any money out of our own pockets. Maybe I’m looking at it wrong. I’m seeing a few customers versus $30,000. Is that the wrong way to look at it?”
“It is in this case,” Spradling said. “If you look at it from just the customer base then this project was never feasible. What makes it feasible is that pumping station and the grant money. That makes this project better than anything Caledonia has seen in a long time.”
“But you’re only getting the grocery store and the house on the corner,” Parham said.
“That’s exactly right,” Spradling said. “But it’s for 50 houses later on because that sewer line will continue….” “But you can get the grocery store and one house with the money that you’ve got,” Parham said.
“That’s correct,” Spradling said.
“Do the houses across the road have to hook in to it?” Gerhart asked.
“No, they are not required to,” Spradling said.
The board voted to proceed with the project 4-1, with Parham voting no.
The board then discussed raising sewer rates.
“The State Revolving Fund project to discharge into the river is about $637,000,” Spradling said. “You’ve invested some money in that already for environmental stuff. We’re waiting to see how the SRF funds are going to become available to that. I recommended to you several months ago that you go ahead and look at a rate increase on your sewer project instead of going up all at once. You can look at going to half the water bill for residential and 100% on commercial, which will be half a step. That will bring in…that will generate about $3,792 per month. The debt on that $637,000 is about $3,300 or $3,400 per month.”
“When do we have to do this?” Parham asked.
“We’ve got to have funding this year,” Spradling said. “We’ve got to start construction by the end of the year.”
“We don’t have a whole lot of choice, I don’t think,” Parham said.
“You don’t have any choice,” Spradling said.
The rates would not need to change immediately, Spradling said.
“When the SRF money becomes available you have got to be able to start generating the revenue to pay for it,” Spradling said. “But we don’t know what that is yet. I’m hoping you’ll get the funding at any time.”
“If you raise your sewer bills it could have an effect on getting the water rate increase,” said Town Attorney Jeff Smith.
[The town requested the Public Service Commission allow a water rate increase to pay off the debt incurred by building the new water plant. The town eventually rescinded the request because of PSC concerns about Caledonia’s sewer rates. As an interesting aside, I understand that not one water rate increase request was approved in 2011, a fact that I’m sure had nothing to do with the election cycle. – Brian Jones] “That’s one of the main reasons we’re bringing it up tonight,” Coleman said.
“The Public Service Commission is trying to say that we spend about 18% of our revenue for sewer,” Smith said. “We said it’s about 8%. If we raise our revenues…we’ve got the lowest sewer rate in the world, just about, don’t we?”
“As far as I know,” Spradling said. “You’re about as low as anyone I’ve ever seen.”
“They’re saying that the sewer customers in the town are being supplemented by the rates paid by the sewer customers outside the town,” Coleman said.
“Well, it’s already out in Caledonia that we’re going to increase the water rates and the sewer rates,” Gerhart said. “Less than six months ago we have these exorbitant raises to folks. They’re going to start complaining. [In September the board gave laborers at the water department a 50-cent-per-hour raise. The water department office manager was given a $1.50, and Coleman was given a 3% raise. Town Clerk Judy Whitcomb was given a 50-cent-per-hour raise, and the town marshals were given some additional hours to work. Gerhart attempted to veto the pay raises, but was overridden. – Brian Jones] If you could get out there and find us some cheap money I’d support this. But every resident of Caledonia will probably never be on the sewer.”
Gerhart blamed the problem on previous boards’ lack of action.
“You know who stands to fault at this low rate?” Gerhart said. “The previous board members. It should have been going up twenty years ago. Then we wouldn’t be having this problem. And the water rates, too.”
“In 1992 it went up from $3.60 to $6.60,” Coleman said. “It hasn’t changed since then.”
Parham made the motion to raise the sewer rates, effective either June 1 or when the SRF money become available and it passed unanimously. The new rates will be 50% of the water bill for residential customers and 100% for commercial customers.
[Coleman estimated that the average water bill is around $28.50. – Brian Jones] 0