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Water use increases but revenue is still down

Gainesville may need to hike rates

POSTED: May 14, 2008 5:01 a.m.

As city officials expected them to do in the warmer months, Gainesville water customers have started using more water. That means Gainesville Public Utilities is making a little more money selling it, but water customers likely still face a rate increase in 2009.

Gainesville water customers used an average of 15.93 million gallons of water per day in April. That’s an increase of more than 600,000 gallons a day over the average water use in March. It is the most water Gainesville water customers have used since October, according to data from Gainesville Public Utilities.

In spite of the rise, and the expected increases in water use during the summer months, the department still is facing significant losses in revenue.

Since the state ordered Northeast Georgia utilities to reduce water use to 90 percent of winter averages, the Gainesville department is "really hurting on" revenues from water sales, said Tina Wetherford, manager of finance and administration for the department.

The department billed water customers nearly $1.54 million for their water use in April. That marks the first increase in revenues since Gov. Sonny Perdue’s edict, but still is a 17 percent decrease from what the department billed customers in April 2007.

"This is a unique year in the fact that water revenues are not going to come in above our projections," Wetherford said.

Gainesville Public Utilities had expected to raise water rates — which typically is done each year — by just 4 percent in 2009. But that was back when revenues were on a steady increase and before the drought became an issue. Now, the department has included a 7 percent increase in its 2009 budget.

However, Kelly Randall, director of Gainesville Public Utilities, asked City Council to wait until October to pass the ordinance that sets water rates, when the department has a better idea of how the drought has impacted revenues. Normally, the council votes on the following year’s water rates in June, along with each department’s budget. But Randall said it is best for customers if the council waits, because by October the department will know how much money was made on water sales in the hotter months, which usually result in higher water usage.

The department has made an effort to mitigate the effects the revenue shortage may have on water bills by cutting expenses. Wetherford said the department cut nearly $1 million in spending that was budgeted for the current fiscal year, and the department’s proposed budget for fiscal year 2009 has been cut from the usual $53 million to $48.6 million.

The department found ways to cut about $750,000 by not purchasing previously budgeted equipment. Also, instead of replacing some employees who left the department, Randall said he restructured the department to "better utilize the staff we had."

Wetherford said Gainesville Public Utilities also has made smaller adjustments, resolving to do as much in-house training as possible and cutting out conferences and expected updates in its billing software.

"If it’s not necessary, we’re not going to do it," Wetherford said.

"I think revenues will be a little bit better, because we’ve been able to tighten our belt," Randall said. "I’m hopeful that we can stay at 7 percent or maybe even slightly lower, but I need to watch our usage pattern."

But Gainesville Public Utilities just makes a suggestion for what the water rates should be; City Council has the final say.

The Times was not able to speak with all Gainesville’s City Council members, but Councilman Bob Hamrick said he would stand behind the department’s recommendation for a water rate increase. However, Hamrick also expects the department’s water revenues to rise in the coming months, and does not expect the increase to have to be as much as the department currently projects.



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