City of Sulphur Springs utility customers can expect water, sewer and sanitation rate increases in the coming fiscal year. The city finance department and officers recommend raised rates to cover utility fund expenditures, future capital and other costs of providing each service beginning in October. A budgeted 9% cost of living adjustment (COLA) and an increase to longevity pay rates for city employees; inflation of costs such as materials, chemicals, repairs and fuel, were cited as major contributing factors for the recommended city utility rate increases as well.
The finance department recommended increasing the sanitation rates by 9.8% to reflect contract provisions. Over the past five years of annual contract increases based on the consumer price index-for urban wage earners and clerical workers (wages for hourly staff — CPI-W) in October, but the city’s rates including any increases are decided on in September. That’s 3.7% more in contract increases than the city has passed on to users, according to city staff.
Year 2017 2018 2019 2020 2021 Average
CPI-W 2.05% 2.69% 1.56% 1.27% 6.85% 2.89% 14.45% City Rate Increase 2.25% 2.00% 1.50% 0.00% 5.0% 2.15% 10.75%
The sanitation revenue was less than projected over the last year. Both sanitation companies serving Sulphur Springs submit rates at the end of October, which is after the annual budget is adopted and, typically utility rates for city residents as well.
The City Council opted to postpone setting a new sanitation rate until November, which would be after Republic and Sanitation Solutions have submitted their requests for increases in sanitation services, as allowed by the contracts the city has with each. They sanitation rates are scheduled to be presented for first reading in November, then, if approved by the City Council, presented for second reading in December 2022.
The City is also recommending an increase in sewer rates, even more than was originally proposed in August, when the City Council received the first full proposed draft of the budget, due to significant increases in chemical costs, higher even than were projected one month ago. This was discovered when city staff opened bids submitted for chemicals to be used to treat sewer and water in fiscal year 2022-2023, which will begin Oct. 1, 2022, along with the utility rates approved as of that time by Sulphur Springs City Council.
For instance, the city had budgeted $60,000 for a new bar screen for the wastewater treatment plan. However, when the five submitted bids were opened on Aug. 10, the lowest bid was for $81,250, two more were in the mid $90,000s, and other two over $100,000 each, the highest bid topping out at $152,000. Sulphur Springs Director of Utilities James Jordan recommended the city reject all bids because of how high there were, then wait a bit longer, in the hope the rates will come down some before bids are once again sought. The City Council did as recommended, rejecting all bids for the bar screen.
Jordan, on Sept. 6, 2022, submitted bids received by the Aug. 9 deadline for six different types of chemicals for City Council Consideration. He recommended the city accept the lowest bids in each category, noting that even doing so at the lowest quoted rate is still expected to cost over $205,600 more this year than last.
Sulphur Springs Assistant City Manager/Finance Director Lesa Smith on Aug. 2 recommended that the base sewer rate, figured based on monthly water consumption, increase from $28.10 for 0-4,000 gallons to $28.65 and the rate per gallon sewer charge increase from $4.07 to $4.15. After factoring in the new chemical bid rates on Sept. 6, Smith recommended that the base rate for all users still be increased to $28.65 for up to 4,000-gallons,but that the rate per gallon sewer charge for use increase to $4.21 for each gallon after the first 4,000 gallons.
Although the rate goes into effect Oct. 1, 2022, the residential consumption will be calculated for hte preceding calendar quarter of December, January and February of each year.
Customers who contribute higher concentrations of waste than normal domestic wastewater will be charged in accordance with the following formulas for extra strength and penalty charges, plus the basic rate:
Sulphur Springs City Council approved on first reading on Sept. 6 Ordinance No. 2814, which will amend Sections 26-2 and 26-2.2 in the city’s Code of Ordinances if approved on second reading on Sept. 20, 2022.
The city officials also recommended increasing the water service rates as well due to the signicantly increased costs of chemicals used to treat water delivered to city customers, some even above the August rates. Water rates for all active connections with meters less than 4-inches in size currently pay a base fixed monthly demand charge of $8.02, plus a $4.05 per 1,000 gallons water usage fee, while those with meters 4-inches or more pay a $939.52 base water charge for up to 230,000 gallons then $3.78 per 1,000 gallons of water usage above 230,000 gallons.
On Aug. 2, 2022, Smith recommended increasing the base water charge to $8.30 and the water use charge per $1,000 to $4.60 for meters less than 4-inches in size, and upping the proposed base water charge up to 230,000 gallons up to $1,066.30 and the rate to $4.27 for water use per 1,000 gallons. Factoring in the $205,600 in chemical fees above last year’s rates for meters 4-inches and over, on Sept. 6, Smith again recommended the base water charge be $8.30 per but that the water use charge per 1,000 gallons of water increase an additional 5 cents to $4.65 for meters smaller than 4 inches, and the base water charge increase to $1,077.80 minimum rate for 0-230,000 gallons of water and to $4.34 per gallon for all usage above $230,000 gallons for meters 4 inches or larger.
Rates for connections and meters outside the corporate limits of Sulphur Springs, however, would be double, according to the proposed Ordinance No. 2813.
Street Improvement Fee
Water bills would still also include as a convenience in billing the street maintenance fee, used for improvements to city streets above the amount typically budgeted from the general fund for the annual Street Improvement Program. The fee is currently $10, which essentially doubles the amount of roads the city is able to repair annually. As proposed in the master fee schedule,
The street maintenance and sidewalk rates proposed in the City of Sulphur Springs Master Fee Schedule, outlined in Ordinance No. 2816 were $10 for the per residential unit per month and per multifamily unit per month, $22.50 per commercial unit per month and $50 per industrial unit per month.
Place 1 City Councilman Jay Julian on Aug. 9 and again on Sept. 6 proposed renegotiating water sales contracts with rural water supply corporations and pass on a street maintenance fee assessment that is equal to the amount that the city residents are paying. The water supply corporations could then pass that assessment on to their customers if they choose, Julian proposed.
The Place 1 Councilman noted that every street in the city is located in the county, while not every road in the county is in the city limits. However, most county residents visit Sulphur Springs for a number of reasons on a regular basis, including to attend church, visit relatives, attend functions at the Senior Citizens Center, shop for groceries and other items, conduct personal banking, attend events at the Civic Center, work and visit city parks. Those visits contribute to some of the wear and tear on city streets. The burden of city street maintenance, however, rests on the shoulders or backs of Sulphur Springs citizens in the form of property taxes and the street maintenance fee assessed on city water bills. The street maintenance fee has increased in the last few years from $5 to $10 per meter for consumers.
According to the 2020 Census, 16,901 of the 36,708 Hopkins County population live in Sulphur Springs. That’s 20,617 people, at an average of 2.68 people per household in the county, which would average out to about 7,692.91 households in the county.
He noted that North Hopkins, Shady Grove, Brinker and Gafford Chapel Water Supply Corporations all purchase water from the City of Sulphur Springs. While his research failed to yield census data for WSCs, Julian recommended adding a street maintenance fee to the WSCs contracts, which would need to be renegotiated. The WSCs could determine how, or if, they’d pass that fee along to their customers, Julian proposed.
He said charging a $10 fee for each of the estimated 7,692.91 county households should generate an additional $923,149.20 in revenue that could be directed exclusively to street maintenance, equalizing, in Julian’s view, the burden of street maintenance among those people who might use city streets.
During the meetings, other city officials said they don’t believe it is legal to pass along that fee to people who do not reside in the city for services they are not necessarily receiving. Plus, it might discourage those county residents, who do pay fees in their taxes and other county and state fees, from visiting Sulphur Springs for shopping, to eat out, attend church or events, where they do contribute to the city for other purposes including sales taxes, donations, and other local fees. That loss of business from enough county residents would negatively affect the local economy and the businesses it supports.
Julian asked that the city attorney check into the matter before the 7 p.m. meeting Sept. 20, when ordinances for the master fee schedule and city utility rates, including water rates, are to be presented for second and, if approved, final approval.
At one point during prior discussions, Julian also proposed a fee could be added to vehicle registration fees charged to city and county residents per vehicle that would go to the city to be applied toward city street maintenance, as the county residents also use the city streets. Those rates are set by the county within certain parameters set by the state, city officials noted.
The Sept. 20 City Council meeting will begin at 7 p.m. in the Council Chambers at City Hall.