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MWA may raise rates

The Macon Water Authority plans to discuss gradual rate increases or rate restructuring as it continues the process of crafting its 2010 budget.

The combination of a wetter year and a dismal economy has meant less water usage and less income for the utility, which began freezing open jobs a few months ago and plans to continue.

The authority already expects to make about $3 million less in net profit this year than it expected, authority director Tony Rojas said. Even so, the authority expects a net income of $4.2 million and is budgeting the same amount for next year.

Based on the first nine months of the fiscal year, which runs from Oct. 1 to Sept. 30, total water use among MWA customers dropped 4 percent from the previous fiscal year, Rojas said. And June consumption was 20 percent less than last year.

The drought that gripped the state last summer has ended, but that doesn’t account for the entire difference, Rojas said. Water consumption has dropped even in the winter months, when there is usually little yearly fluctuation because people aren’t watering their lawns. He attributes the difference to customers economizing during the recession.

The floundering economy and particularly the construction slowdown has hit the utility in the pocketbook. It means the authority has less fee income arriving from new water and sewer hookups and expansion of the system. And the authority has watched its income on investments drop from a high of about $2.5 million several years ago to just $800,000, Rojas said.

The authority’s income from growth-related fees has been almost sliced in half, dropping from $4.9 million in 2007 to $2.7 million this year, Rojas said.

The workload has disappeared from jobs that involved locating utility lines for developers and inspecting new sewer lines, he said.

“We were doing over 18,000 locates (of utility lines) a month,” Rojas gave as an example. “But we had a little over 2,000 last month.”

TIGHTENING BELTS

Rojas has suggested postponing purchases and seeking loans from the Georgia Environmental Facilities Authority for two big infrastructure projects: a sewage pump station at Allen Road for $2.5 million and a new sewer line between the Corbin and Lennox pump stations for $4 million.

The Corbin-Lennox sewer line has seen repeated sewage spills as growth in north Bibb County overwhelms it.

Those two projects were scheduled to be funded this year through the authority’s $15.8 million capital reserve fund, but $8 million of that must now remain untouched for financial reasons related to variable-rate bonds the authority issued this decade.

The authority also will reduce its investment in sewer upgrades from $1.35 million to $850,000 in fiscal 2010, Rojas said.

No merit raises are included in the fiscal 2010 budget, which the authority discussed at a Finance Committee work session Monday.

Noting the many awards employees at the treatment plants have won recently, authority member Frank Patterson suggested offering one-time bonuses instead. Rojas said he’d calculate projections of how much it would cost to give bonuses of $500 or $1,000.

But MWA Chairman Frank Amerson objected.

“With economic conditions and (our) income down like it is, it’s jut not good business,” he said. “And I think it’s going to get worse before it gets better.”

The committee made no decision on the matter.

RATE STRUCTURE

The authority scheduled a Sept. 10 meeting to discuss its rate structure and receive a contractor’s report about how other utilities are structured.

Rojas said the income stream for water utilities is changing. In the past, they profited from droughts because customers watered more. Those consumption fees have been the main source of income.

But in the past few years, droughts resulted in watering restrictions, and some providers were forced to reduce their water sales to avoid shortages.

“The question becomes: Do you want more revenue coming from your base rate or from your consumption?” Rojas asked.

Examples of the possible rate structure changes include eliminating the base rate, which is lower for the first 300 cubic feet of water used, for all customers or all non-residential customers; changing how the base rate is calculated; and charging different sewer fees for different meter sizes, so heavy water users pay more for their outgoing sewage, too.

The authority agreed this year to revisit its rate system for apartment buildings after state Sen. Robert Brown, D-Macon, proposed legislation that would have controlled how the authority could set apartment rates.

Apartment owners were angered several years ago when the authority began charging them both a minimum monthly fee and a charge per apartment, regardless of whether the apartment was occupied.

Rojas has said the rate restructuring process probably will make policies more uniform for all customer types, but it’s unlikely that apartment owners will end up paying less as a result.

Although the authority is considering rate increases, those do not have to be approved before the 2010 budget, which is scheduled for a vote Sept. 3.

Information from The Telegraph’s archives was used in this report. To reach writer S. Heather Duncan, call 744-4225.

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