An increase in McComb’s water and sewer rates and possibly the late and reconnection fees is likely to be approved next week, but those increases may not be the only ones on the horizon.
For several weeks, the city board has discussed implementing a 2.3% rate increase for water, which would raise bills by about $1 per month, City Administrator Dirkland Smith said.
However, the city never implemented some recommended increases in the sewer rate that the previous board approved that would have boosted it to 142.5% of the water rate.
Those figures were presented to the city in a water study done in 2016 that was supposed to help pay back three State Revolving Fund loans for water and sewer infrastructure.
Mayor Quordiniah Lockley said at Tuesday’s work session that the previous board approved two more projects funded by State Revolving Fund loans — the Water Well No. 5 replacement project and the Northwest Interceptor sewer upgrade project — but never planned how to pay back those loans.
“We didn’t follow those recommendations (in the 2016 water study), and now we’re behind the eight-ball,” Lockley said. “The prior board started these projects, and they were completed under this board.
“The rates were not increased to pay for the three loans we already had, and now we have two SRF loans that we don’t have a plan to pay for. That’s a nightmare. I hope (the 2.3% increase) is enough, but the back of my mind says it won’t be.”
Lockley said neither he nor Public Works Director Alice Barnes could find anything in city files that represented a plan to pay back the new loans. He recommended the city commission a new rate study.
The city will start making monthly payments of $26,159 for the Water Well No. 5 project in April. The state will take that payment — as well as the as yet unknown payment amount for the Northwest Interceptor — out of the city’s sales tax returns, and the utility fund will reimburse the general fund for those sales tax proceeds.
“Whatever a study says, we can’t go wrong with an increase,” Selectman Ronnie Brock said. “We’ve got to have it.”
Smith said the 2016 rate study said McComb’s water rate alone should have been $75 then. The city’s base charge for water, sewer and garbage is now $71.65, including $18.28 for water and $22.67 for sewer, as well about $21 for garbage and a $9 capital improvement fee.
“We’ve got to do what we have to do and take the heat from the citizens,” Brock said.
“I think we need to do the water and the sewer rate and get current,” Selectman Devante Johnson said. “There’s no way around it.”
Barnes calculated that raising the sewer rate to 142.5% of the water rate would add about $1.82 to utility bills. She said Wednesday that was calculated after factoring in a 2.3% water rate increase.
Smith said Wednesday he would not recommend one method over the other, and that it would be up to the board how and when to implement water and sewer rate increases.
While there was broad agreement on the need to boost the water and sewer rates after that discussion Tuesday, debate continued on whether or how much the city should raise reconnection fees for delinquent water customers.
Smith initially recommended raising the reconnection fee from $20 to $50, but lowered his recommendation to $35 when several selectmen balked at the steep increase. He asked board members Tuesday to consider raising the fee to at least $30, which would still leave McComb on the low end of the scale for such charges in the area.
Johnson asked how much money the city collects in reconnection fees as well as in late fees, and Lockley said the amount for both should be lumped together in the budget, even though that’s not how the city has established its line items.
The budget for this year estimated $140,000 for late fees and $3,000 for reconnection fees. However, Lockley said the city averages about 1,000 customers paying late fees and 280 paying reconnection fees monthly.
At $5 for late payment each month and $20 per reconnection currently, late fees would total about $5,000 per month and $60,000 for the year. Reconnection fees would total about $5,600 per month, about $67,200 per year.
With more people paying late fees than reconnection fees, “can we raise the late fees instead?” Johnson asked.
“That’s up to the board,” Lockley replied.
Selectman Ted Tullos said the reconnection fee should be the less painful fee to raise.
“You don’t have to pay a reconnect fee,” Tullos said. “You know you have a bill. Pay your bill, and you don’t need to pay a reconnect fee.”
Smith said raising either fee could be effective, but “you have to raise it high enough to make an impact.”
He noted again, as he did in the previous meeting and work session, that he had heard people in the city hall lobby say they weren’t going to stand in line waiting to pay their bill because “the reconnect fee is only $20.”
Johnson calculated, at the existing rate of late or non-payment, that raising the reconnection fee to $35 would raise monthly revenues to $9,800, while boosting the late fee from $5 to $20 would boost revenues to $20,000.
“We should raise fees where we’re going to get the most money,” he said.
“That’s kind of tough,” Brock said. “You’re putting that burden on a different class of people,” the occasionally forgetful rather than the deliberately delinquent.
“If I raise the late fee, I’m going to have 1,000 people angry at me,” Lockley said. “If I raise the reconnection fee, I’m going to have 280 people angry at me. I’d rather have 280 people angry at me.”
Johnson argued that $15 increase would be the same on either fee but bring in more money on the late fees, prompting Brock to say, “Did you hear what he just said?”
Brock asked for another rundown of the reconnection fees in the area and what the average would be. Smith said the average would be a bit more than $45.
“We may as well bite the bullet and do the average,” Brock said.
“I agree with Mr. Brock, but we’re missing the point,” Tullos said. “We want the disconnections to go away.”
Both the water and sewer rates and reconnection fees are slated to be on the board’s meeting agenda next week.
