Fayetteville City Council April 6 voted 4-1 to increase water and sewer rates by 15 percent beginning June 1.

No question was posed by the public and virtually no discussion was entertained by the board.

Only newly-elected Councilman Paul Oddo questioned the measure and subsequently voted against it, suggesting a smaller increase rather than shocking the system with a 15 percent increase now and the possibility of a 9 percent increase in 2007 and another in 2008.

After the presentation by the city’s Finance Department and prior to the vote, Oddo said he had prepared an analytical review of the proposed increase. While not opposed to an increase, he did question the need for a 15 percent increase, suggesting instead a 4 percent rise in rates to put the city in compliance with the bond requirement.

“An increase in revenues of 3.88 percent would generate sufficient income to meet the bond covenant and would contribute a like amount for asset replacement, otherwise known as depreciation” Oddo said.

“The Water and Sewer Department is a virtual monopoly. Customers within the city currently have no option. Therefore, comparison with other cities is informative, but unlike private enterprise, a customer can not go elsewhere if he feels fees are too high,” Oddo said, citing statements showing Fayetteville’s rates after the increase would still be appreciably lower than many in metro Atlanta.

”In just two years we have instituted a stormwater fee which is in addition to the water and sewer rates,” Oddo said. “And increases are planned in the future for this fee. Instead of shocking the system with a 15 percent increase now followed by two possible 9 percent annual increases (in 2007 and 2008), spread the possible increases out over the next eight years at 4 percent each year or the increase in the Consumer Price Index, whichever is less.”

Oddo was the only council member to bring questions on the proposal. Mayor Kenneth Steele responded after Oddo completed his remarks.

“I agree with some of what you’re saying and disagree with most of it,” Steele said. “The proposal meets audit standards and was done at the direction of the council.”

Steele said the final figures will put the city in the lower half of water and sewer providers in the metro area. The figures are extremely low compared to some in the metro region and other parts of Georgia, he said.

As she had in the prior meeting, Assistant Director of Finance Ellen Walls reviewed the proposed increases for the council. She cited the three objectives of the study, including the full cost recovery of system operating expenditures for the city’s water and sewer facilities, arriving at rates sufficient to support financing of capital projects and repayment of debt, including debt coverage, and arriving at rates sufficient to provide for depreciation of assets and renewal and replacement of assets.

Walls again 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.

Walls said the Finance Department recommended an increase phased in over three years, beginning with a 15 percent increase this year followed by 9 percent increases in 2007 and 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.”

As she had done in the previous meeting, Walls provided examples of the proposed increase for June 2006, showing residential water usage of 0-2,000 gallons going to $13.20 from the current $12, rates for seniors using 0-3,000 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 $29.00, Peachtree City paid $32.85, Fairburn paid $36.23 and Tyrone customers paid $59.57.