Board of Works recommends city water rate increase

A three-prong rate increase for Greencastle water customers has been recommended by the Board of Public Works and Safety.

During a brief special meeting Monday afternoon, the Board of Works passed along a recommendation to the City Council to increase water rates in three annual increments over three tiers of users.

The City Council is expected to consider the recommendation at its October meeting set for 7 p.m. Thursday, Oct. 8 at City Hall.

Tier 1, which includes the first 2,000 cubic feet of water, will get a 10 percent increase beginning Jan. 1, going from the current $4.47 per 100 cubic foot to $4.92. In 2022 it will see another 5.09 percent increase and if the city fails to get a $700,000 Office of Community and Rural Affairs (OCRA) grant by 2023, an additional 6.19 percent rate hike would be needed the third year.

Tier 2, the next 8,000 cubic feet of water, would see an increase from the current $2.81 to $3.23 in 2021 and $3.71 in 2020 via identical 14.9 percent rate boosts. If there’s no OCRA grant, Tier 2 would go up another 6.19 percent in 2023.

Tier 3, which covers 10,000 cubic feet of water will go from its present $2.26 to $2.61 on Jan. 1 and up to $3.01 for 2022. That represents identical 15.4 percent increases with another 6.19 percent due in 2023 if there is no OCRA grant.

Meanwhile, wholesale users will see increases of 10 percent, 8.27 percent and 6.19 percent over the three years of the rate hike. Those contract users will see the cost of water go from its current $2.53 per 100 cubic feet to $2.78 with the 10 percent hike in 2021 and $3.01 with the 8.27 percent bump in 2022. If a third increase is needed, the 6.19 percent hike will push the cost per 100 cubic feet to $3.20.

The rate increases, Clerk-Treasurer Lynda Dunbar said, will “get us very close to where we need to be with our five-year plan and with our 2021 budget.”

The numbers proposed in Tier 2 and Tier 3, she said, are “closer to what it costs to produce water. It gets us close to where we need to be.”

The water rate increase will also include a first-time fire protection fee billed monthly. For those with 5/8- to 3/4-inch meters, the monthly fee will be $4.24 ($50.91 annually). The fee rises commensurate with the size of the meter.

Before this, the fire protection fee has been paid by the city using tax dollars.

Under the new ordinance, everyone will share in the hydrant fee, Dunbar pointed out. Instead of just property owners ultimately paying, churches, schools and others who don’t pay property tax will help fund fire protection.

The increases will mean about a $7 jump ($2.70 in water rate and $4.24 for fire protection) in monthly rates for minimum users in year one on Jan. 1.

“I took a look at mine,” Mayor Bill Dory said of his water bill, “and it looks like it was going to go up $9.”

Deposit fees for water customers will also go up under the ordinance from $50 to $100 beginning Jan. 1.

”I’m comfortable with this,” Board of Works member Trudy Selvia said after dissecting the numbers.

Fellow board member Craig Tuggle made the motion to send the water rate increase recommendation on to the City Council. Voted by Selvia and Dory made it unanimous.

Mayor Dory was asked about the status of the OCRA grant. He explained that OCRA will likely present the grants in the first quarter of 2021 and usually has more than one round of grants per year.

The first thing for the city is an income survey, which is already in the beginning stages, Dory said, indicating it should be finished in late October or early November.

“There’s a bunch of steps,” the mayor said, “but the process has started.”