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Water rate hike might be less than 7 percent

POSTED: May 6, 2008 5:00 a.m.

Gainesville City Council members got a bit of good news Thursday in the last hearing before City Manager Bryan Shuler presents the final budget on May 8.

Gainesville’s Public Utilities Director Kelly Randall said that it may not be necessary to raise water rates as much as he previously had predicted.

At February’s City Council retreat, Randall predicted a 7 percent rate increase for 2009 because of the financial impact of the drought. That’s about 3 percent more than the normal annual increase. In February, Randall also said it would be necessary to use money from the department’s "piggy bank" or expansion and renewal fund.

In Thursday’s budget meeting, he said that no longer may be necessary.

Randall said he expects water use to rise in the coming months, increasing revenue. He also said his department has been able to trim its operating budget by 8.2 percent by cutting some of its capital outlay, or the purchase of equipment such as trucks and tractors, and reorganizing the department’s staffing.

"We’re doing our best not to pass these costs on (to the customers)," Randall told the council.

Randall did not, however, offer a prediction of a proposed water rate at Thursday’s meeting. Yet, rising fuel costs, postage and electricity costs, and a prediction of a 12.5 percent increase in the utilities department’s debt are very real situations that will affect the rate.

"(This drought) is a new reality for the utility," Randall said.

He said he still does not know what Gainesville’s new withdrawal permit is for the summer, and expects the state Environmental Protection Division to give him new direction on drought response on May 6.

Randall promised that a reliable prediction could be made later in the year, perhaps October. Whatever proposal Randall does make for water rates would have to be voted upon by City Council.

Life and health insurance

Human Resources Director Joan Sheffield told the City Council that a major change is due in the city’s health insurance policy, and expects a "significant" $1.3 million increase in the city’s costs of health benefits. Sheffield and consultant Rob Fowler, executive vice president of Turner Wood and Smith Insurance, told the council that though the city had been budgeting $5,600 in insurance claims for each insured employee, it would have to now budget $7,393 each.

"It’s a hard pill to swallow, but it has to be gobbled down," said Gainesville Mayor Myrtle Figueras.

Fowler said the only way for the city to reduce health insurance costs in the long-term was to reduce the number of claims filed. One way to do that is to have an insurance plan with a higher deductible, because it would cause employees to "consider treatment options more carefully," according to an information packet Fowler and Sheffield gave the council. But Fowler said the main way to reduce claims is to reduce the number of employee health risks, like high blood pressure and sugar levels, by creating programs that encourage them to alter their habits and lifestyles. Fowler also proposed the creation of an "onsite medical clinic" that would give employees convenient access to a physician with no deductibles, and access to programs that would improve the long-term health of city employees.

"Don’t look at (the onsite clinic) as an additional cost item," Fowler said. "...the only hard cost is the setup costs for the clinic."

The city should decide on a plan by the middle of May.

City Council also held a work session Thursday morning, and met with multiple members of the Fair Street Neighborhood Planning Unit, hearing the group’s plans for the revitalization of their neighborhood. The group is the first neighborhood planning unit in the city and is meant to be a prototype for later neighborhood planning units.



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