Increase goes into effect May 1
The water and wastewater increases approved on first reading in March were made final Monday with unanimous approval from the Alachua commission.
The new rates will go into effect on May 1 and will mark the first rate increase in 16 years.
Mike New, public services director, said he received two calls about the rate increase after the first reading. He said both calls were merely for clarifying and understanding the increase and weren’t negative.
Mayor Bonnie Burgess and Commissioner Jean Calderwood said they also heard feedback from citizens of a similar nature.
At the March 22 commission meeting, commissioners discussed how they were reluctant to approve such a drastic fee hike but agreed it was necessary.
“This has been a long time coming,” said Mayor Bonnie Burgess. “It’s never a good time to raise any rates. If there is, I’d like someone to give me that date because I haven’t run into it, yet.”
For years, Alachua’s water and wastewater utilities have relied on the city’s electric utility to balance the budget, with both water and wastewater accruing a $900,000 debt to the electric department.
If the rate proposal passes, water and wastewater will begin paying off the debt over the next 20 years.
All three are enterprise funds, said Alachua Public Services Director Mike New. This means that each should be self-sustaining and produce revenues sufficient to meet expenses.
Alachua City Manager Traci Cain said in an e-mail interview on March 24 that keeping the electric rates at their current levels while increasing those of water and wastewater would allow the city to rebuild the reserve funds in the electric utility.
“The City's Electric rates remained constant for the past 16 years. The reason why the Electric Fund had [additional funds] available to cover the deficit in the Water Fund and Wastewater Fund was due to the increase in the number of customers and electric consumption due to the City’s growth over time.
“The City's current electric rates will produce revenue sufficient to cover the operating costs of the Electric Fund and begin to replenish its reserves that are needed to fund new capital projects and renewal and replacement projects, which historically have not been adequately funded. This unrestricted cash could be utilized to fund appropriate projects so that the City would not have to incur additional debt expenses,” Cain said.
Alachua’s water and wastewater rates are significantly lower than the nearby municipalities of High Springs, Newberry and Gainesville. Coming after a six-month rate study, the increase will put Alachua roughly on equal footing with all three surrounding cities.
In Alachua, the average household uses about 7,000 gallons of water monthly. Under the existing rate, this household is charged $11.70 per month. Under the proposed rate, charges would jump to $20.46. The rate for that same household would be $18.85 in Gainesville, $23.83 in High Springs and $20.25 in Newberry.
The proposed rate increase encourages conservation by doing away with the minimum monthly charge and replacing the flat rate system with a tiered system. Under the minimum monthly charge structure, all customers were charged for using 3,000 gallons, whether or not they used that much.
The tiered rate rewards conservation by charging a lower rate on fewer gallons used. The rate for the first 4,000 gallons used is $1.59. That rate increases to $2.07 for every one thousand gallons used between 4,000 and 8,000. Every one thousand gallons used above 8,000 would cost $3.10.