OAKWOOD — Most sewer customers in Oakwood could see a first-time user fee starting Jan. 1, the start of the South Hall city’s 2014 fiscal year.
The city is proposing a $2.67 million budget in sewer operations next year. Revenue sources include $1.9 million in Georgia Environmental Finance Authority loan proceeds, $250,000 in connection fees and $175,000 from the general fund.
Another $245,000 would be raised by the new sewer fees.
“Long term, we’ve got a note that will be about $1 million a year worth of payment we’ll need to make to GEFA,” City Manager Stan Brown told the Oakwood City Council during a budget work session Monday afternoon.
“The only way we’re going to do that is through revenue coming in through the sewer fund. So, if we can’t do it through new connections, we’re going to have to pay it through user fees.”
Oakwood doesn’t own a sewer plant or operate a sewer system itself, but relies on Gainesville and Flowery Branch to provide service. The other cities also generate sewer bills for Oakwood.
“We have a (sewer) add-on on some of the Flowery Branch accounts, based on some agreements ... when we did some sewer line extensions,” Brown said after the meeting.
That charge, particularly for some users in the Martin Road area, has been about $1.50 per month.
Otherwise, the charge would be new in Oakwood. All customers are paying for service through Flowery Branch or Gainesville.
But under the plan, Oakwood customers on Gainesville sewer would pay an additional $2 per month on their base rate, raising it to $10.40 per hundred cubic feet, or 748 gallons, from $8.40.
The Oakwood add-on for Flowery Branch customers would be based on usage.
Businesses that use up to 7,000 gallons of Flowery Branch sewer would see a base rate of $97.30, up from $40.53; and businesses that use more than 7,000 gallons would see their rate increase to $13.90 per 1,000 gallons, from $5.79.
The add-on would be as high as $22 per month for residential customers using between 2,501 and 4,500 gallons per month.
“We’ve held off as long as we can on the sewer situation,” Mayor Lamar Scroggs said. “Users are going to pay a little extra to help retire the debt.
“That’s not saying it’s any kind of tax increase or anything. It’s just a matter of fact that the users are going to have to step up and pay the bill.”
Brown said if the city tried to make up the difference through property taxes, it would take another 1.5 mills.
The city’s proposed tax rate for 2014 is 2.658 mills — unchanged from the current year — with 1 mill equal to $1 per $1,000 in assessed property value.
“I think there’s a fairness issue (involved),” Brown told the council. “You’ve got a lot of property owners who do not benefit from sewer. Sewer is an enterprise — it’s a utility. It’s very common — in fact, it’s the norm — for sewer to pay its way and not have to subsidize it from the general fund.”
The council is set to hold its first reading on the proposed tax rate at its regularly scheduled council meeting at 7 p.m. Monday. The final vote is set for 4 p.m. Oct. 21.
A budget hearing is set for 4:30 p.m. Oct. 28 and adoption is set for 7 p.m. Nov. 11.
All the actions will take place at City Hall, 4035 Walnut Circle.
Tax bills will be mailed Dec. 2.