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Flowery Branch buys buildings, sets lease

City losing money on sewer, water system

POSTED: February 17, 2008 5:05 a.m.

Flowery Branch City Council approved the purchase of two buildings, 5509 and 5511 Main St., for city use at a cost of $300,000 today. The city had been renting the building at 5509 Main for the past two years for use by the city’s planning department.

“We’re looking at it as an investment, because now we own an entire block,” Flowery Branch Mayor Diane Hirling said. “We’re not sure yet what we’ll do with them, but we’re using them as an investment for the city.”

Hirling said the the city will lease the building at 5511 Main to the karate studio currently operating at that location.

In addition to the purchase of the two buildings on Main Street, the council also decided to relocate the city’s planning department and city manager offices to two separate units located directly across from city hall on Main.

The city has an annually renewable three-year lease with the buildings’ owner, Hortman and Dobbs LLC.

Hirling said the city will pay Hortman and Dobbs $2,200 per month to lease the two units that will house the 2,100-square-foot city manager and planning and zoning department.

Auditor Dan Walker also informed Flowery Branch City Council today that the city’s water and sewer services were operating at a minimal loss.

Flowery Branch City Manager Bill Andrew said the city sewer and water revenue for the past fiscal year generated $1,326,943 in total operating revenue, but the city made a profit of only $62,072.

“When you factor in the interest charges then we’re actually completely in the hole $33,374,” Andrew said. He added the city’s sewer and water systems have been operating at a loss for several years now.

In an effort to generate more revenue from the city’s water and sewer, Andrew said the city approved to pay the Southeast Rural Community Assistance Project nearly $3,000 to conduct a study investigating how much the city should increase customers’ sewer and water rates for the systems to operate with a profit. Andrew said the new rates could be in place by July 1.

Andrew added the city signed a bond agreement in 2004, now held with Bank of America, that requires the city to increase water and sewer rates by 20 percent annually for five years. He said the city staff is currently considering charging Flowery Branch sewer and water customers a differential rate that would charge customers located further away from the sewer and water plant more than customers located nearby.

The city also approved to pay the Carl Vinson Institute of Government at the University of Georgia $3,500 to undertake a study examining the salary of city staff.

“We’re doing that to try to bring our wages up to standard,” Hirling said. “We believe we’re paying all our employees less than other cities our size are paying, and we need to be competitive with our wages.”



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