Gainesville City Council is deadlocked on whether to raise water rates 1 percent after a 3-3 vote Tuesday night.
City management officials said they would work to revise the ordinance, which, in addition to setting the water rate, also sets the sewer rate, account service fee and other utilities costs for 2015, in the coming weeks.
If the impasse remains, officials said the water rate would remain unchanged next year.
Council members Ruth Bruner, Bob Hamrick and Myrtle Figueras voted in favor of the increase proposed by Public Utilities Director Kelly Randall, while Sam Couvillon, George Wangemann and Mayor Danny Dunagan voted against.
Four votes are needed to approve the increase.
Randall said the 1 percent increase would generate about $230,000 in revenue.
The increase would amount to only a few cents each month for most low- and high-end residential water users.
But the increase could cost businesses thousands of dollars.
“It is huge to our large customers,” Dunagan said, adding that he’d like to approve a zero percent increase just once.
The city has about 50,000 water customers, with Fieldale Farms the largest user.
However, water sales have slowed in recent years, a result of the economic recession and conservation efforts.
Randall said that while the utilities department could withstand no increase in water rates, he cautioned officials that it might result in large spikes in rates in the coming years.
“(Customers) don’t want to be waiting every year wondering what we’re going to be doing with the rates,” he said. “They would like to have a consistent plan.”
Moreover, Randall said he prepared his department’s budget for the current fiscal year with the increase in mind.
“If we don’t do it, we can certainly tighten our belts,” he added.
According to city finance officials, the utilities department has about $15 million in cash reserves for operations and $39 million invested in capital projects.
While officials were split on whether an increase was financially necessary or prudent, the debate also had a taste of politics about it.
“I think it’s irresponsible of us to say, well, we’ll just save people a little bit of money this year and then compound it in the next few years,” Bruner said.
In supporting the increase, Hamrick said he was concerned about the utilities department’s debt, referring to tens of millions of dollars owed in bond payments.
Randall said the department has an annual mortgage payment of more than $21 million.
Meanwhile, Wangemann said he was undecided until hearing from constituents who opposed any rate hike.
“My father always said if you’re really for something, then make it happen,” he added. “I’m really for no increase. There’s always a risk involved. But I think the risk is not so great that we’re going to lose our shirts.”