BAKER — City Council members discussed instituting a flat fee water rate increase Wednesday of $3 a month to offset rising expenses for operating the city’s utility system.
Residential customers in Baker pay a flat monthly rate of $9 for water and a usage fee of $1.50 per thousand gallons, Baker Public Works Director Julie McCulloch said.
The flat fee monthly rate for businesses is $12 with the same usage fee as residents.
Utility consultant C.J. Arnold, who did a water rate study for the city back in 2009, suggested raising rates to keep up with operating costs, repairs and upgrades to the system and to generate enough money to cover the city’s debt service obligation on bonds issued for city water improvements in 2010.
The city borrowed $4.7 million for the water improvements, which included installing electronic water meters for customers.
Arnold recommended during the City Council’s work session Wednesday setting a flat monthly rate of $12 for residents and a $1 rate for businesses while also raising the usage fee to $1.75 per thousand gallons.
Mayor Harold Rideau said during the meeting that the city’s water system is losing money and McCulloch characterized it as “barely breaking even.”
Arnold said adding an inflation adjustment to the rates was one reason for the increase.
City Councilman Pete Heine said he was concerned federal agencies that loaned the city money for the water improvements might force the city to adhere to higher water rates that the federal government could set.
“Look, I hate to vote for a water rate increase but I think if we let people know that the feds could come in here, they would understand why we have to do this,” Heine said.
City Councilwoman Joyce Burges said it wasn’t a good time to raise water rates but Heine said “there is never a good time.”
Arnold said the city agreed when it borrowed money for the water improvements to charge rates that would produce enough revenue over expenses to meet the city’s debt service.
Rideau said after the meeting that he thinks water rates need to be raised to maintain the operations of the system as well as to meet the federal debt obligations.
“I mean, where else, can you tell me, could you pay a base rate of $9 for water? We just have to have a certain amount of revenue over expenses now,” Rideau said.
The City Council will vote at a future meeting on Arnold’s recommendation to raise water rates.