The Chelsea Standard
A Heritage Newspaper
Weekly Publication
Council approves utility rate increases
By Edward Freundl, Staff Writer
PUBLISHED: March 20, 2008
Chelsea residents will pay more for water, sewer and electric service following the City Council's approval of rate increases at its March 11 meeting.
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The increases of 2 percent for electric service, 3.5 percent for water and 5 percent for wastewater will go into effect Tuesday.
Although several residents attended the required public hearing, not one spoke up for or against the proposed increases.
Councilman Rod Anderson supported Councilman Frank Hammer's motion to approve the new rates.
"Each of these utilities is run essentially as a private business and it has to meet its payroll," Anderson said Tuesday.
"The increases are relatively modest, and it's an unfortunate fact of life is that prices of utilities are not going to get any lower.
"The extenuating factor is that we are streamlining the operation to make it a lot more efficient."
The recommended increase in sewer service had been 9 percent, but City Manager John Hanifan decided to present the council with the lower amount.
"Based on the cost savings of the reorganization of the water and wastewater departments, I am recommending a 5 percent wastewater increase rather than the proposed 9 percent," he said.
The departmental shift came in August when Water Department Superintendent Rob Jones' position and another part-time position were eliminated.
That department's operations then came under the jurisdiction of Wastewater Superintendent Brad Roberts.
In January, Electric Department Superintendent Andy Johnston resigned form his post in January after pleading guilty to engaging in illegal activity in his office.
His job is being filled on an interim basis by former department director Bob Shepherd.
Roberts is now poised to become director of an entirely new Utilities Division, encompassing the water, wastewater, electric, public works and solid waste departments.
The council will take action on that proposal later this year.
Anderson said the increases were necessary to keep the utility funds solvent.
"We're barely keeping up with inflation," he said. "The money's got to come from somewhere to provide those services. We're not taking money from the general fund to subsidize utilities."
The utility rate increases were suggested by the results of a comprehensive rate study completed in 2005, but never fully implemented, and a new rate study is being considered.
For fiscal 2008, the water department will have projected expenses of $1,110,839; projected revenues of $1,514,964; adjusted operating income of $485,086; and a projected cash balance of $1,263,521.
The new monthly rates for water range from $5.95 for a 3/4-inch meter or smaller to $91.85 for a 4-inch meter.
The new monthly sewer charge will range from $7.88 for a 3/4-inch meter or smaller to $140.12 for a 4-inch meter.
Although the electric rate increase was the smallest, its rate structure is the most complicated. The new rates follow:
Rate 2.0 - Residential with electric heat or water heating: $6.32 monthly, $0.0812 per kWh first 250 kWh, $0.0726 next 400 kWh, $0.0812 in excess of 650 kWh
Rate 3.0 - Commercial: $18.36 monthly, $0.0990 per kWh first 10,000 kWh, $0.0959 in excess of 10,000 kWh
Rate 4.0 - Commercial Power: $33.66 monthly, $0.0990 per kWh first 10,000 kWh, $0.0959 in excess of 10,000 kWh
Rate 5.0 - Municipal including Street Lighting: $6.53 monthly, $0.0803 per kWh
Rate 6.0 - Municipal Water Pumps and Wastewater Plant - $36.72 monthly, $0.0765 per kWh
Rate 7.0 - Reserved
Rate 8.0 - Industrial Power: $76.50 monthly, $10.46 per kilowatt of demand, $0.0408 per kWh
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