By DEBRA HAIGHT
BCR Correspondent
BUCHANAN – Buchanan city residents are likely to see their water and sewer rates go up again later this year and continue to increase in future years, consultant Andy Campbell told City Commissioners Monday night.
Campbell presented the results of his company’s water and sewer rate study at Monday night’s commission meeting. Municipal Finance Advisors Bendzinski & Co. conducted the study over the last several months, looking at the water and sewer projects scheduled to be done as well as the rates required to do that work.
Campbell said that while the city has made progress in addressing water and sewer infrastructure needs in the city-especially on the sewer side, more work needs to be done. He estimated it could cost between $17.5 and 21.4 million over the next nine or ten years to just complete needed water system improvements including replacing lead service lines.
“You’ve made a lot of progress, especially on the sewer side, but there’s still a lot to do,” Campbell said. “A lot of work had been delayed and the costs keep going up at the same time there is a lack of grant funding.”
While some state grants and federal earmarks have already been received or applied for, he said that there won’t be enough funds from those sources to cover all the costs. He also noted that there is stiff competition for some of the state revolving fund grant/loan packages as communities all across the state have to complete lead service line replacements by 2037.
He described the state revolving fund as “very nonpolitical” in that the state uses a scoring system and lobbying efforts won’t work. He said communities are scored for their median household income levels and Buchanan actually doesn’t reach the “overburdened” status needed to get the top score in that category. “We’re hoping you’re still in the fundable stage but we won’t know until September,” he said.
Campbell told commissioners that the eight percent rate hike cannot go away. “We will be seeing eight percent raises for the foreseeable future unfortunately,” he said. “The capital improvement plan is still too extensive. The goal is to increase rates higher than the inflation average to catch up.”
“You’re still at the point you can’t afford all you need to do,” he said. “The city is obviously looking for grants and federal earmarks and trying to decrease the costs for ratepayers. But even with the eight percent increase, you’re just keeping up with compliance and making sure the system is functioning.”
He gave estimates of what the eight percent rate increases would mean for the average household bill. He said the average water bill for city residents will rise from $51.53 a month to $55.65 a month. The average monthly sewer bill will go from $84.21 to $90.95.
Campbell did say that the city’s water rates are slightly higher than water rates in other communities around the state, while the city’s sewer rates are significantly higher than sewer rates in other communities, an average of over $50 more than other nearby communities.
City Manager Tony McGhee noted that the rate increases for Buchanan city residents are lower than what some communities are seeing as those communities weren’t pro-active in addressing their needs.
As part of his report on the need for the two eight percent rate hikes for a combined 16%, Campbell went through the specific needs of the city’s water and sewer departments in 2027. He estimated that $2.4 million will be needed to make water and sewer system improvements next year.
Those projects include work on Oak Street and Days Avenue as well as three parking lots.
The rate increase proposal will now go to the Joint Water Sewer Board and then to the individual boards.
Tony McGhee said he expects the proposed rate increase to come before the commission in May with the new rate to go into effect in July.
He said that there are about $17 million worth of capital improvements between now and 2029-30. That number does not include all of the current water and sewer capital needs but keeps the city on pace as they work to catch up on deferred investments. That amount is also in addition to what was recently spent on the downtown infrastructure project.
Of the $2.4 million in projects for 2027, they are getting $1.4 million from state grants and federal earmarks with the rest coming from the water and sewer reserves as well as the general fund.