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Flowery Branch set to discuss budget today

POSTED: June 14, 2008 5:00 a.m.

Nearly $400,000 of new sewer and water ventures will have to wait so the Flowery Branch City Council can balance its sewer and water fund for the upcoming year, Mayor Diane Hirling said.

The City Council will consider the proposed fiscal year 2009 utility and general fund budgets today. The budget will cover city expenses from July 1 to June 30, 2009.

The proposed general fund for fiscal year 2009 totals $2,780,875. The proposed enterprise fund that includes city sewer and water services totals $2,390,310.

For the past several years, the city’s sewer and water treatment plant has lost money.

Hirling said city officials have tentatively decided to cut several lift station and water line repairs on Lights Ferry Road, as well as light and hydrant construction proposals from this year’s budget to offset the operational costs of the treatment plant.

According to Bill Andrew, Flowery Branch city manager, total operating revenue last year for the city’s sewer and water treatment plant was $1,326,943, and the plant generated a profit of $62,072. But after the city paid off its annual bond with Bank of America, Andrew said the city’s sewer and water plant is "completely in the hole $33,374."

The city signed a bond agreement with the Bank of America in 2004 that requires the city to raise its water and sewer rates 20 percent each year for five years. The bond agreement was made to allow the city to pay off its roughly $7 million debt to Hall County, which helped the city to fund its plant expansion to 1 million gallons per day of capacity.

The city has paid off about half of that $7 million debt, and this year is the last the city is required to increase rates in accordance with the bank bond agreement.

The City Council will consider establishing new differential sewer and water rates at its next meeting at 10 a.m. on June 18. The proposed rates would take into account the extra cost of providing to customers farther away from the plant and could generate more revenue for the city’s sewer and water fund.

Hirling said she aims for the city’s enterprise fund to be at least self-sufficient this year.

She said Flowery Branch is currently using only about 400,000 gallons of the 1 million gallon treatment plant.

The remainder of the plant’s capacity is reserved by Oakwood and Hall County, the majority of which is not being used at this point. The same capacity Oakwood and Hall County have reserved in the plant would generate more revenue for Flowery Branch if it were being used, Hirling said.

"We’re definitely in a Catch-22," Hirling said.

"We just had a study done, and (our rates) are very low," she said. "But we don’t want to raise our water and sewer rates any higher because we know the public is having enough trouble paying for gas and food and everything."

Chris Fetterman, Flowery Branch city councilman, said he’s concerned about the city adopting the budget before establishing new city sewer and water rates.

He said he’s particularly concerned about a proposal to adopt new rates that requires residents who have lived within the city limits since June 20, 2000, to pay more for sewer and water than older residents.

"I think we need to have equal rates for people across Flowery Branch, not different rates for people based on how long they’ve lived in Flowery Branch," Fetterman said.



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