When the Gainesville City Council voted Tuesday to raise the account service fee on water bills in lieu of increasing water rates, customers outside the city limits must have a felt a reversal of fortunes.
That’s because after years of seeing reductions in the fee, which covers the cost of reading meters, sending bills and related customer service issues, it is now rising again.
City officials began lowering the fee for some 39,000 nonresident water customers in 2011, dropping it from $7.66 down to $4 over two years and bringing the charge in line with what city residents pay.
At the time, officials said reducing the fee was the right thing to do because one group of customers was essentially subsidizing another.
But officials also attributed the reduction in the fee to new technology.
“Now that we can read meters in the office, we can pass on the savings to the customers.” said Tina Wetherford, finance division manager for the public utilities department.
Now, the monthly fee for all customers will rise 85 cents, from $4.25 to $5.10, beginning in January.
Wetherford said the increase would generate about $244,000 in revenue in the first six months of 2015.
The fee hike, in part, offsets the loss of revenue from council’s decision to keep water rates unchanged next year.
But the fee is likely to increase again in the near future.
According to public utilities officials, the actual cost of providing the service covered by the fee has been estimated to be between $5.79 and $6.07.
“In light of that, I’d be interested to know what the real cost is,” said Councilman Sam Couvillon, who objected to increasing the account service fee 85 cents from an initial proposal of 65 cents.
Wetherford said the public utilities department would continue to refine the cost estimate.
Public Utilities Director Kelly Randall said the account service fee could be adjusted up over the next three years so it pays for itself, but cautioned that the fee is also calculated based on revenue projections each year.
Wetherford said moving to more online billing will potentially reduce the fee in future years.
In the meantime, city officials appear intent on raising the fee incrementally until the service is fully paid for, but no more than that.
“I’ve got a little bit of a problem with (the fee) anyway, but I do understand the reasoning behind it,” Mayor Danny Dunagan said. “My feeling right now is that once we reach this, they’re going to have to live with it.”