A committee composed of two Tompkinsville city commissioners, plus an engineer and the city clerk, will meet Monday to discuss the possibility of increasing water rates.
After receiving the city’s fiscal audit for the 2012-13 fiscal year, the commission realized the city’s water system wasn’t generating enough money to break even.
“The city got the audit for the fiscal year and realized that they were having a potential for a cash flow problem,” said David Bowles, president of Monarch Engineering Inc. of Lawrenceburg, on Friday.
Bowles was asked by the commission to conduct a water rate study to determine how much water rates would need to be raised if an increase was necessary to make the city’s water utility viable.
In conducting the study, Bowles looked at the amount of water the city’s system produces verses the revenue it generates, plus the cost to the city to operate the system.
The study, which was presented to commissioners during a special-called meeting Thursday, revealed the commission will have to increase retail water rates by $3.33 per customer per month to fund the improvements to the water system just to break even.
In addition, the commission would have to increase the wholesale water rate it is charging the Monroe County Water District by 35 cents per 1,000 gallons of water per month.
“We are going to have to raise rates enough to where we can repair water lines,” said commissioner Scotty Turner during the commission meeting.
He estimated on Friday it has been between six to eight years since the city raised its water rates.
At present, the city is not breaking even with its water system.
“We are no where near breaking even,” Turner said on Friday.
Compared to surrounding cities, Tompkinsville has one of the lowest rates for water in the area.
“Glasgow, of course, is the lowest because they have so many more customers,” he said.
Turner feels an increase in water rates is imminent because the city needs revenue to maintain the water system in the event of water line leaks.
“By law, we have to raise them to balance the budget because it’s state law that the city has to have a balanced budget per department to be in compliance,” he said. “We have to raise them to that amount.”
The city would have to increase the retail water rates by $3.33 per customer per month in order to stay in compliance.
The water rate study also revealed the city’s water system had a 71 percent water loss, which is a percentage that is considered to be very high. The average percentage of water loss is about 15 percent, Bowles said.
“We had the same problem with the gas system,” said commissioner Jeff Harrison during Thursday’s meeting.
Harrison continued, the commission knows it needs to fix “a bunch of leaks” and said the repairs to the water system will correct the water loss problem.
Bowles pointed out it will be rather costly for the city to fix the water system problems. Obtaining money to fund the repairs will also be an issue.
“You can’t get any [money] from the two main funding sources until you and the county hold hands and agree to go the same path,” Bowles said during the meeting.
The two main funding sources he was referring to were the Kentucky Infrastructure Authority and the United States Department of Agriculture.
“We will try to get all the grant money we can,” Turner said on Friday. “We are still going to be out of pocket quite a bit for it, I’m sure.”
Commissioners discussed programs for replacing water meters, which would help alleviate the city’s loss of water.
The city has worked out an agreement with the county water district to purchase refurbished water meters at $25 each, which is about half the cost, said Shawn Martin with RussMar, a management company that is overseeing the city’s maintenance department.
Turner pointed out the city was already supposed to have a program in place for replacing water meters.
“What happened to it,” he asked during the meeting.
Martin replied that the program got “put on hold.”
The city had set aside $96,000 to fund the purchase of water meters to help ease the loss of water.
“We knew we were losing quite a bit,” Turner said. “That’s the whole reason why we raised the water rates last time. I think our goal was to set 20 to 30 meters a month until we got them all changed out. If that program has been stopped, we definitely need to get back on it.”
It was pointed out during the meeting that a while back the commission voted to borrow money from the meter fund to pay some of the city’s bills.
Mayor Jeff Proffitt stated during the meeting that he supports the idea of increasing water rates, but said he believes the rates should be increased enough to generate adequate revenue to fund future repairs to the water system and not just enough to break even.
Turner said on Friday he doesn’t necessarily want the city to make money with its water system.
“I just want to have enough money to be able to work on stuff and replace lines whenever they need replacing, instead of having to take money out of the general fund,” he said. “I think the water department should be able to fund itself.”
Commissioners discussed having a special-called meeting to inform the public about the problems with the water system and the need to increase water rates.
“This is fixing to be a pretty good chunk of money,” Turner said.
Commissioners agreed to appoint a committee to look into the possibility of increasing water rates. Those who will be serving on the committee will be: commissioners Ricky Richardson, Bowles and city clerk John Buford. The committee is scheduled to meet Monday.
Read more of this story in the print or digital Glasgow Daily Times. http://glasgowdailytimes.cnhi.newsmemory.com/