Hawthorne water surcharge to reducebudget deficit

At a Hawthorne City Commission meeting Tuesday night, commissioners voted to add a surcharge to the city’s water rates in order to make up for the significant deficiencies in the city’s enterprise fund.

The surcharge rate will be a flat rate of $15 per water connection per month until the end of the fiscal year.

According to Interim City Manager Ellen Vause, the surcharge will be implemented until the United States Department of Agriculture (USDA) Rural Development can conduct a water rate survey and develop a proper rate for the city.

But an adjustment to the water rate isn’t the only change Hawthorne will be seeing.

In an effort to decrease expenditures and increase revenues, the city commission has adopted several budget cuts including a 10 percent decrease in commissioners’ salary, three staff layoffs and a decrease in staff benefits.

The decision to add a surcharge came about after a budget workshop on Friday, which highlighted the significant deficit in the city’s enterprise fund.

“At the workshop, we detailed our expenditures, revenues and deficiencies and discovered that even with all of the other cuts, we would have to increase our water and sewer rates,” Vause said. “If you look back historically, the enterprise fund has lost a significant amount of money ever year, which shows we aren’t generating enough revenue.”

At the commission meeting, Vause compared rates to other local cities of the same size and population. “Our water rate for 3,000 gallons is $11.97, while most other cities’ rates range from $24 to $34. The water revenue that comes in barely pays for the loans from the USDA for the water system.”

Currently, the city staff is in the process of getting the necessary materials together for USDA to perform the water rate survey.

After reviewing the adopted budget prepared by former city manager Ed Smyth, Vause said the main issues lie in the “over projection” of tax dollar revenues and enterprise fund revenues. Property tax dollars have been declining and the number of homes and businesses buying water and sewer from the city has been declining, she said.

“It was an optimistic revenue stream projection.”

Now the city is working to slowly pick up the pieces, and according to Vause, last night’s commission meeting showed the effort put in by both the residents and the commissioners.

“I think it’s a team effort and I was really proud to see the support the community gave the commission and the willingness of the commission to take the bull by the horns,” she said. “It was a good night.”