Athens growth could mean higher sewer, water rates
By Bayne Hughes
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ATHENS — Athens residents may soon pay for the city's growth, in the form of increased water and sewer rates.
John Stockton, manager of Athens Water and Wastewater Department, told the City Council during a fiscal 2008 budget work session Wednesday that sewer revenue isn't keeping up with growth.
He said rate increases, above an annual 2.5 percent automatic increase to keep up with inflation, may be necessary as early as the fiscal 2009 budget so the city can meet its debt-service requirements.
The department charges a minimal impact fee for new developments.
Stockton projected a $3.7 million wastewater budget and a $4.6 million water budget for 2008.
"The wastewater budget I've given you is a minus $57,256 budget," Stockton said. "We can cover the wastewater deficit with the water revenues right now, but we're going to have to do something to increase revenues soon."
Stockton also is concerned about the water budget's ability to cover the sewer budget's shortfall.
The Limestone County Water and Sewer Authority currently buys about 300,000 gallons of water daily, some of which it then sells to Madison, Stockton said. Limestone also buys 10,000 gallons a day from Decatur Utilities.
Athens' contract expires at the end of the budget year, and Stockton said Limestone could begin buying most of its water from Decatur. He estimates that losing Limestone as a customer would mean a $100,000 annual loss.
"If this happens, we'll have to find a new source of revenue," Stockton said.
Athens is working to build a wastewater treatment facility costing $29.5 million. The city secured $20 million in low interest loans from the state, but must find a way to fund the remaining $9.5 million.
Stockton said planning for growth is straining the budget. He said the city needs a new pumping station at Canebrake subdivision, a smaller pumping station at Round Island Creek at U.S. 72 and two more along Moyers Road. Also, the Swan Creek pumping station will soon need expansion.
He estimates the city will need up to $20 million to serve the undeveloped portions of the city's new established service area due to annexations.
"When the Interstate 65/Tanner Road interchange is complete, there will be a boom in growth in the south side of the city," Stockton said. "We're seriously looking at rate increases because we're committed to several formidable capital projects."
There are also plans to add new 12-inch water lines at U.S. 72 and Mooresville Road, Clinton and Oakdale roads and to Alabama 251.
Another issue that will almost certainly affect Athens Water and Wastewater is a recent court agreement with Limestone Water and Sewer Authority. The two are exchanging 840 customers each.
Athens' former customers living outside the city limits pay 1.5 times what those inside the city limits pay, but they now go to the county, while Athens picks up 840 inside the city limits.
Stockton estimated this would cost the city between $100,000 and $125,000.
A big unknown for the city is industrial development. Mayor Dan Williams said the city never knows when a company might look at moving to Athens. When that happens, it becomes a priority for the city to meet the company's water, sewer and electric needs.
Stockton said the Base Realignment and Closure commission's plan could also affect the city's budget.
Williams and the council members asked Stockton to develop a three- to five-year capital needs plan, including how he projects funding these projects.
In other business, Gas Department Manager Steve Carter presented a proposed 2008 budget for Athens Utilities that projected about $13 million in revenues and $12.8 million in expenses.
He also asked for $1.5 million in capital expenditures, including a $24,000 truck, a $25,000 automatic meter reader, a $35,000 message sign, a $125,000 trencher and a $75,000 heavy duty construction truck.
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