Fayetteville customers, prepare to pay a third more for your water and sewer service over the next three years.

A recent water and sewer rate study has resulted in a recommendation that Fayetteville increase water and sewer rates 33 percent over three years and increase the sewer proportionate share fee.

Council members on March 16 heard the first reading of an amendment that would put the changes in water and sewer rates in effect beginning June 1. The council did approve an increase in the sewer proportionate share to cover one-half the cost of the current sewer plant upgrade.

Assistant Director of Finance Ellen Walls provided an in-depth explanation of the study designed to determine if a rate increase was needed.

“We wanted to study this thoroughly,” she said.

The study, said Walls, addressed three goals and objectives. Those included the full cost recovery of system operating expenditures for the city’s water and sewer facilities, to arrive at rates sufficient to support financing of capital projects and repayment of debt, including debt coverage, and to arrive at rates sufficient to provide for depreciation of assets and renewal and replacement of assets.

Walls cited several reasons for increasing water and sewer rates. Those included the increase in operating expenses, various debt service requirements, assistance in financing capital expenditures, building a reserve for water and sewer renewal and replacement of assets and to encourage water conservation.

Based on the study outcome, Walls said the department recommended phasing in increases in water and sewer rates over a three-year period. Proposed rates for combined water and sewer reflected a 15 percent increase beginning in June, followed by a 9 percent increase in 2007 and a 9 percent increase in 2008.

“This is not a one-year fix,” Walls explained. “We need to do it over a period of time and study it annually. We thought doing it over three years was the thing to do. Doing it all at once would be irresponsible to the citizens.”

Examples of the proposed increase for June 2006 show residential water usage of up to 2,000 gallons per month going to $13.20 from the current $12, rates for seniors using up to 3,000 gallons at $11.20 compared to the current $10 rate and the current commercial rate for up to 2,000 gallons increasing to $24.20 from the current $22 rate.

Comparable residential rates for sewer indicated an increase to $12 from the current $10 bill, senior rates increasing from $8.50 to $10.20 and commercial increasing by $3, positioned now at $20 and proposed at $23.

Proposed rate changes were included for other services such as reconnection fees, processing fees for new service and transfer fees within the city.

Using 2005 as a test year, Walls said revenues totaled $4,402,959 while expenses totaled $4,658,183, showing that revenues are not sufficient to support system expenses.

Compared to other cities in the area, Fayetteville’s current rates are significantly lower, Walls said. Based on a water bill reflecting usage of 7,500 gallons of water, the cost to Fayetteville customers is $25.20 compared to $26.10 in Newnan, $26.25 in Palmetto, $27.40 in Union City, $31.40 in Peachtree City and Tyrone and $43.53 in Fairburn.

Similar numbers held for sewer bills. Only Union City came in lower than the $19.07 paid by Fayetteville customers. Newnan customers paid $26.25 while Palmetto customers paid $29, Peachtree City paid $32.85, Fairburn paid $36.23 and Tyrone customers paid $59.57.

Even with the recommended increases over the three-year period, Fayetteville customers will still pay a lower combined water and sewer services rate than customers in Peachtree City, Fairburn and Tyrone, Walls said. Comparisons were based on no fee increases in other municipalities, she said.

Council members voted 4-0 to increase the sewer proportionate share to recover half the cost associated with the $19.78 million wastewater treatment plant expansion, a project that will double the current sewer capacity and one designed to serve the city through build-out.

The rate for new sewer connections would deflect the cost of the new facility away from existing customers and place this responsibility on new commercial and residential development, Walls said. The council approved new residential sewer connection fees of $3,531, up from the current $1,036 fee.

The current fee places Fayetteville at the lowest charge of any area city, while the new fee is comparable to the $5,000 fee charged by Fairburn and lower than $4,650 charged by Douglasville and $5,000 in Palmetto.

Sewer connection fees for commercial properties, said Walls, are structured differently and differ by project due to the variables involved.

The second reading and a potential vote on the recommended water and sewer rate changes will be considered at the council’s April 6 meeting.

On another March 16 agenda item, the council approved a non-profit funding policy that furnishes guidelines for non-profit organizations that want to request financial assistance from the city. A non-profit application must be submitted prior to April 1 each year to be considered.

The city of Fayetteville currently funds one non-profit, Fayette Senior Services, at a rate of approximately $17,000 annually. Commenting on a recent request by Promise Place Director Sonja Strickland, Mayor Ken Steele said both organizations meet the city’s requirement of providing food, shelter and protection to Fayetteville citizens.

The city has a $25,000 annual cap on non-profit funding.