A 4 percent increase in water and sewer rates for Flowery Branch customers, effective Jan. 1, was approved Thursday night by City Council.
“I think it’s the right thing to do,” City Councilman Joe Anglin said. “We can look at (rates) on a yearly basis and see how things are going with population growth and other dynamics that are involved.”
Councilman Fred Richards said, “As with any business, we need to operate on at least a break-even basis.”
“And it hasn’t been,” Anglin added.
The vote followed an hourlong presentation by the city’s consultant firm, Athens-based Nelsnick Enterprises, on Flowery Branch’s water and sewer needs.
Several months ago, Nelsnick initially recommended a 7 percent hike in rates, but council members directed staff to see if that number could be lowered.
Bobby Sills, Nelsnick’s rate and billing analyst, told the council Thursday the city needs at least a 3 percent increase “to cover budget.”
“The extra 1 percent (would go) toward to the capital (improvements) program that we think is coming. We just don’t know exactly when.”
City Manager Bill Andrew said the city is taking money from its capital fund “just to make our (operating) budget.”
“We’re eating the reserves right now,” he added. “We’re starting from a negative situation. The 3 percent gets us to a neutral situation. The 4 percent gets us to a little bit ahead of the curve.”
In a written summary of the issue, city officials said “the current water-sewer capital infrastructure needs are increasing as our city continues to grow.”
The South Hall city needs to develop a capital improvements plan to comply with Georgia Environmental Protection Division regulations “and to meet the demands of our growing city,” the document says.
“The need for these rate changes is an important contribution to this plan.”
Flowery Branch’s rates cover customers both inside and outside the city.
Under the proposed rates, customers are charged based on various levels of usage and categorized as either single-family, multifamily or nonresidential, such as businesses. Customers outside the city typically pay higher rates.
For example, the lowest water charge for a single-family customer inside the city would be $6.45 for up to 1,000 gallons. The same type of user outside the city would be charged $8.59.
Current rates are $6.20 for up to 1,000 gallons for a single-family customer inside the city and $8.26 for the same type of user outside the city.
An earlier report from Nelsnick said that existing infrastructure needs replacement and that system expansions and extensions are “most likely needed.”
The firm “has found (that) the utility is currently not providing sufficient system revenues to recover costs,” the report states. “The result is a depletion of reserves to balance the budget.”
The last rate adjustment took place in August 2014.