Frostproof utility users can expect to see a jump of about $4 a month in their monthly water and sewer bills in coming months.
An ordinance requiring city water and sewer rates to be annually adjusted based upon the Consumer Price Index was kept in place by Frostproof City Council members during their meeting Monday evening.
The motion was to actually rescind the ordinance. Diana Webster Biehl, Martha Neher and Louise Goddard voted against that idea, however, while Ralph Waters and Mayor Anne Dickinson voted for its repeal.
As this ordinance will continue to remain in effect, proposed water and wastewater increases will be reviewed at the next budget workshop at 4:30 p.m. Aug. 18.
On Nov. 16, 2009, the Frostproof City Council passed an ordinance requiring city water and wastewater rates to be reviewed and adjusted annually according to fluctuation within the CPI; however, in recent years, the Council has failed to comply with this ordinance, in effect ignoring its own law.
Auditor Turner Wiggins informed them that they either had to follow the ordinance or rescind it altogether.
Waters voiced his approval of rescinding the ordinance, claiming that it remains superfluous now that the city is in a much better financial condition than it was when the ordinance was first passed.
Waters mentioned how the general fund is projected to experience a fund balance of $1.8 million, with a reserve over 35 percent, while the enterprise fund will have a projected balance of almost $500,000, with a 44 percent reserve, more than what auditors had suggested.
“The small amount that we might raise (with the rate increase) will not make a big difference in any of those individual projects (that we have), but the individual rate increases would affect our constituents,” Waters explained. “I don’t think we are in the same condition now than we were five years ago, so I don’t think our citizens need another raise in the water bill.”
Mayor Anne Dickinson agreed with his sentiments, arguing that, even without the ordinance, the council would still be able to adjust utility rates according to their own discretion.
“It (CPI) goes up every year, you don’t have a choice; and if we rescind it (the ordinance), at least the council has a choice to increase it (the rates) if it needs to be, and if there is no need to do it, our citizens would be better off,” Dickinson said.
Neher said, however, she felt the ordinance was necessary in order to adjust rates according to a consistent standard such as CPI.
She warned that if rates were not adjusted frequently and consistently, then many residents, especially those under the poverty level, would be forced to pay heavily increased rates that they could not handle.
“If we do away with that ordinance, then we might go along for the next five years and not do a CPI increase, and then, all of a sudden, have to catch ourselves up, and at that point, we are going to have some serious increases,” Neher said. “So I would rather see us do the CPI increase, which is minimal, on a regular basis, than have these people face a big bill sometime in the future and wonder what happened.”
Vice Mayor Diana Biehl also supported raising rates, claiming that now was the best time for them to catch up with CPI.
She mentioned that several city projects could potentially benefit from such a surplus, and would be much more preferable than simply placing them off or seeking grants to finance them.
“I think we are much wiser to position ourselves so that we have the resources to deal with whole infrastructure and be able to self-finance rather than have to pass on high rates to our residents, and I think an automatic CPI increase is considered proven and reasonable in most financial circles,” she said.
City Attorney Mark Smith suggested that another option, other than following or rescinding the ordinance, would be to ignore it.
“What happens if we don’t follow our own law, and we don’t increase it by CPI? Nothing. It just doesn’t go up,” Smith said. “But if someone wants to sue the city to make it enforce its own law to increase the water rates, nothing happens, and I’m not sure that would be a successful suit anyhow.”
City Manager Tenny R. Croley reminded him that not following their ordinance would place them at risk of being written up on the audit and reported to the state. Neither she nor Smith were familiar with the consequences if that were to happen.
Goddard suggested possibly raising only the water rates but not the sewer rates, as some residents such as herself are attached to the city’s water system but not the sewer system. Smith said that this was possible.
Biehl and Waters inquired if it was possible simply to remove or reword the provision requiring a CPI increase from the ordinance.
Smith replied that the whole ordinance would have to be rescinded with a new ordinance drafted and reviewed during two future hearings.