No water, sewer hike

While there was some support for raising water rates to begin building up funds for a new water plant, the Vandalia City Council decided on Monday not to increase water and sewer rates.
During a work session held prior to Monday’s city council meeting, Tricia Elam of Timmermann and Co. Ltd., the city’s auditing firm, presented aldermen with five options on water and sewer rates based on operating costs.
With the operation costs for both water and sewer decreasing from April 2017 to April 2018, three of those options would not require a rate increase for either, based on a 1996 ordinance.
That ordinance, passed by the council in 1996 after a double-digit rate increase, states that unless the council takes action otherwise, increases in operational costs are mirrored with rate increases.
That ordinance does not allow for rate decreases.
And while three of the options presented by Elam show no need for an increase, she explained that the decreases are due to the fact that the city did not have to contribute to its self-insurance fund and a good return on Illinois Municipal Retirement Fund investments.
The final figures in the five options depend on expense adjustments and contribution to the insurance fund, Elam said, noting that the city will again be contributing to that fund in the coming year.
The options showing decreases in operational costs are: 30.9 percent for water and 21.82 percent for sewer; 16.41 percent for water and 12.74 percent for sewer; and .88 percent for water and 2.73 percent for sewer.
The other options showed increases of 7.82 percent or 6.87 percent for water and 7.54 percent and 4.60 for sewer.
Elam said the auditing firm recommended the third option, with $308,832 added for health insurance expense in water and $105,437 for sewer, and pension expenses of 283,947 in water and $92,376 in sewer.
“This is the calculation that I feel is the best if you are comparing your expenses from a prior year to this year,” Elam said.
“This is the calculation that, to me, that the ordinance would accomplish, this is the one you would look at,” she said. “It is a true calculation when you look into operations.”
Both before and after Elam’s presentation, Mayor Rick Gottman told aldermen, “Keep in mind, we’re looking at $21 million cost for a new water plant, and we’ve got pensions that we are obligated to.
“And, we’re not going to get all the grants (for the water plant). We’ve already been told that,” Gottman said.
“We’ll be getting some grants, but not near enough, because it’s not out there,” he said.
Gottman also reminded aldermen about the November vote on a half-cent sales tax increase, “which is more of fair tax.”
Without the passage of the sales tax increase, Gottman said, “the other option is a (property) tax increase … and we don’t want that.”
City Administrator LaTisha Paslay told aldermen during the work session that the council is always given options on water and sewer rates, and it has gone with the middle option in the past. Last year, when an increase was recommended by the auditor, the council chose not to implement an increase, she said.
Despite the recommended option with no increases, Alderman B. John Clark said that he favored an increase so the city could start building up funds for the water plant construction project.
The city is going to have the needed funds, he said during the work session. “If we don’t do it, we aren’t going to have any water.”
Prior to the council’s vote during the regular meeting, Clark said, I think that we should raise it a little bit.
“We do know the cost of the water plant,” he said, and with that project, Clark said, “We know our water rates are going to go up, if we can’t get a head start on it.”
Alderman Mike Hobler disagreed, saying, “I truly believe we need to leave it alone. We’re asking for citizens to approve a sales tax increase.”
He prefers that method of generating revenue, Hobler said, because “everyone’s going to pay for it,” including tourists and other visitors who spend money in Vandalia.
Alderman Dorothy Crawford agreed with Hobler, saying during the work session, “We’ve jacked around with people’s water bills enough; I think we should unjack them some.”