The Millwood City Council received an outline for balancing its water budget on Monday night, the latest in a series of recommendations designed to propel the municipal utility out of an ongoing financial drought.
Ben Varela of Varela and Associates presented the governing board with a overview of water department costs and expenditures covering the next six years at the council’s monthly meeting. Varela said talks with the state Department of Health began in April 2010 with a draft of the plan being prepared by last June.
Millwood turned in its finalized rendition the early part of last month, weeks before the March 1 deadline.
The key to the document, Varela said, was to achieve a balanced budget, an accomplishment that has been nothing short of a challenge for Millwood in recent years. Varela added that the new strategy does not include funds from the utility’s reserve account, but instead the sort of rate increases the council heard about at its Feb. 8 meeting.
“This is about balancing a budget with revenue increases not reserves,” Varela said.
After Council Member Kevin Freeman expressed concern that the budget had been constructed “without a rate structure in place,” City Clerk Tom Richardson pointed out that the proposal from Varela and Associates “is not an official budget” and that the final document still requires approval from the City Council.
Following Varela’s presentation, Richardson introduced three ideas regarding the water budget, starting with the prospect of raising the monthly base charge from $17.35 to $20.18, an increase of 16 percent.
Richardson also brought up the possibility of reducing the current base amount of 4,000 cubic feet – or 29,920 gallons of water – per month to 2,000 feet, or 14,960 gallons per month. In a presentation on Feb. 8, Andy O’Neill of the Rural Community Assistance Corp. pointed out that 30 percent of Millwood residents and 71 percent of businesses fall short of the base usage on average.
O’Neill noted that a change to 2,000 cubic feet would still leave 17 percent of citizens and 57 percent of commercial sites below the base level.
Richardson’s final recommendation on Monday involved moving the commercial overage rate of 14 cents per 100 cubic feet – the amount charged to water customers who exceed the base usage – to 20 cents.
“All of these represent a starting point,” Richardson said of his three options.
The city has not increased water overage rates since 1981, although it did hike the monthly water rate from $14.70 to $17.35 in 2011, the first modification to the basic rate since 1995.
Millwood Mayor Dan Mork said O’Neill could potentially be brought back to discuss funding options in light of the new budget. Richardson said the timeline would likely not feature any rate changes prior to June 1, but would include feedback from citizens in the form of updates and a special meeting.
“For some, it’s a big change,” he said. “We want to make sure the community has a chance to tell us what they think.”
In other council news:
- Beginning in May, the council will hold its regular monthly meeting on the second Tuesday of each month at 7 p.m. For decades, the meeting has been held on the first Monday of each month. Richardson said the new schedule would provide more time for council representatives to review relevant materials and for staff to generate more current financial reports.
- The Millwood Public Works department purchased an industrial lawnmower in the amount of $12,789. Funds for the purchase came from the city’s real estate excise tax, newly installed last year.