City of Sedalia residents and business owners will soon see a slight increase in the sewer rate after the Sedalia City Council approved a rate increase during Tuesday’s meeting.
Council heard a quarterly update on the wastewater and sewer relief projects from Olsson Associates during the pre-council meeting, which was followed by a presentation on proposed sewer rates to help continue improvements and to decrease dependency on sales tax revenue.
It was decided to approve a gradual rate increase to help with costs, but to prevent an “astronomical” increase like the one citizens saw in 2010 — after six years of no increase and receiving the administrative order of consent from the Missouri Department of Natural Resources that required the sewer relief project, rates increased by 187 percent. City staff hopes the gradual increase will reduce the impact on citizens and businesses, preventing the need for another large increase down the road.
“We’re in danger right now, in my opinion, of repeating history,” said Finance Director Kelvin Shaw. “We haven’t touched those rates in five years, and again, you’ll see in our recommendations how that really just got us to the point of where we’re keeping up now, we’re not progressing forward.”
The monthly base rate for all three categories — residential, commercial and industrial — will stay the same. The monthly volume rate per 1,000 gallons will increase from $3.95 to $4.65 for all three categories. According to a chart provided by Olsson, with an average residential usage of 4,000 gallons, the average Sedalian’s sewer bill would be $26.37, just $2.77 higher than it is now.
Jim Condon, of Olsson, told council that Sedalia’s new rates are on par or lower than other communities of similar size in the area. Warrensburg, for example, has the same residential base rate but has a higher per gallon rate.
Taxpayers approved a quarter-cent sales tax in 1989 for capital improvements, specifically for the sewer system. It was renewed in 1995. It was extended in 2005 to 2026, but it was changed from sewer improvements to general capital improvements.
“As far as the sales tax impact, we were using that quarter-cent sales tax to fund the capital expenditures and really tying (council’s) hands in that we were consuming all of that quarter-cent sales tax in the sewer and all the improvements and replacements and repairs,” Shaw said.
… We’re now allowing that to go to other capital improvement projects,” he continued. “In the future what we’d like to do is we would like to pare that back a little bit. Again, not to tie council’s hands at all, but to free it up to where council can make the conscious decision, where does this priority stack up with another priority — do we want to build this road or fix this intersection or building? Or do we want this improvement to the sewer project?”
Shaw noted that rate-payers should be paying for the utility they receive, but they shouldn’t pay for things taxpayers should be responsible for. Because of that, the sewer system was changed to an enterprise fund in the current budget, which means:
• The fund needs to be self-sufficient.
• The city needs to address inflation.
• The city is paying catch-up after the sewer rate has not been changed since 2010.
• Dependence on supplemental income — sales tax — should be decreased or eliminated.
The sales tax represents 15 percent of the total income for the sewer system, and the goal of the increased sewer rate is to decrease that dependence. Shaw said sales tax should only be used for capital improvements, such as replacing sewer lines, but not sewer repairs.
Shaw told the Democrat after the meeting it had been previously discussed to begin the rate increase Oct. 1, but that date has not been finalized.
During the meeting council also:
• Approved the audit results of Fiscal Year 2014-15 from Fred Korte, of Gerding, Korte & Chitwood.
• Approved an ordinance approving an agreement with the Pettis County Ambulance District regarding a proposed TIF district on undeveloped land near the intersection of West Main Street and U.S. Highway 50.
• Approved an ordinance vacating an existing utility easement for Waterloo Industries Inc. for property located at 1500 Waterloo Road. According to information in the meeting packet, there are no city utilities in this easement, so it is no longer necessary.
• Approved an ordinance amending Ordinance No. 10356 regarding a rezoning application by Connie L. Koering, trustee of the Janice Collins Trust, for property located at 704 S. Montgomery Ave.
• Approved an ordinance granting a rezoning application by Sure Coat LLC for property located at 1505 N. Ohio Ave. This was unanimously approved by the Planning and Zoning Commission following a public hearing during its Sept. 2 meeting. The proposed ordinance would rezone it from R-1 and C-1 to M-1 Light Industrial.
• Approved a bid for $5,463.40 from Otten Small Engine for the purchase of a new mower and bagger for use at a city cemetery.
• Approved a records destruction request from the Personnel Department.
• Approved a quote of $37,690 from Buyboard for the purchase of additional server storage.
• Approved the new appointment of Ron Ditzfeld to the Tax Increment Financing Commission Board, with a term to expire July 2019.
Nicole Cooke can be reached at 660-826-1000 ext. 1482 or @NicoleRCooke.