Tuesday's Internet Edition, September 30, 2008.
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| PROFESSIONAL BULL RIDER Wade Payne of Beaver, Okla., tries to stay in the middle for eight seconds at the Bossier Country PRCA Rodeo held over the weekend in Fairfield. |
That news was given to council members by city administrator Mike Gokey at a water workshop session last week.
We are losing a lot of money every day, Gokey says.
Since October 2006, expenses for the water and sewer department have exceeded revenue by $963,133, about half of that over the past seven months.
Bank accounts for the department have dwindled from $1.1 million to $114,000 during the past 18 months, and Gokey predicts that the department will be broke in 28 days.
I wanted to deliver that message, get it over with and increase rates, the city administrator says.
The shortfall, Gokey explains, is due to a drop in revenue. He points out that commercial and residential customers are not using as much water as they have in the past.
Expenses for the department actually are 12 percent under budget for fiscal year 2007-08.
Its just a total lack of revenue, the city administrator says.
The fix is to raise water rates.
Gokey last week proposed that the base residential water rate be raised 43 percent and the commercial rate be increased 33 percent to stem the flow of red ink, but says those proposals have been shelved.
Sewer rates, which are based on water usage, would increase 12 percent for residential customers and nine percent for commercial customers.
The city administrator started working on water and sewer rate increases last October, but a stalemated council has taken no action.
If the council approved rate increases in the next week or two, the additional money would not reach city coffers until the end of June.
Fairfield has the lowest water rates of any city in the area, $18.63 cents for 5,000 gallons, the next lowest being Corsicana at $25.01. Teague bills customers $27.84 for 5,000 gallons of water a month.
Gokey met with water and sewer department employees last week to instruct them to look for ways to cut expenses, but major costs such as chemicals to treat water and wastewater, and electricity to operate facilities are fixed.
Fairfield has applied for an $11.5 million Texas Water Development Board low interest loan to tap into Richland-Chambers Reservoir to meet future water needs, but the city could not make the loan payments in its current fiscal state.
Principal and interest on the loan would cost $474,000 per year, Gokey reports, and the water and sewer department could not fund that amount today.
The city secured water rights to the reservoir eight years ago and has only about two years before it has to start paying a fee to Tarrant Regional Water District, which owns and operates the reservoir, even if no water is drawn.
Surface water from the reservoir would supplement groundwater from wells, and the need for that is becoming apparent because the static level of underground supplies is dropping.
Gokey reports that the underground water level at the Ivy Well, located east of town, has fallen 91 feet since 1999. Water levels at the other three city wells have dropped 56-73 feet over their lives.
If water rates are not raised, the city will have to dip into its general fund to help pay water and sewer department expenses.