Columbia leaders question proposed utilities hike

Columbia’s utilities department officials have proposed rate increases for five utilities, but council members questioned some of them at Wednesday’s public hearing on the FY2018 budget.

Voters approved gradual storm water and sewer rates in the past few years and solid waste rates are on the increase because the cost of dumping into a new landfill increased.

The utility department is proposing a four percent hike on water bills and a one percent hike on electrical bills. According to the department’s director Tad Johnson, it needs to raise the water rate to pay for planned capital improvement projects. The water revenue goes into the department’s cash reserve when the city isn’t paying back loans on a bond. The electricity rate revenue will be used for operational costs, which are stretched thin in the department due to rising health care and pension costs.

Voters last approved a water bond issue back in 2009. It’s now been paid off so water customers are paying directly into the cash reserves.

Mayor Brian Treece said Wednesday that he didn’t think taxpayers should pay a rate increase on water and electrical bills to assist the department in “stockpiling cash.”

Second Ward Councilman Michael Trapp said paying into the cash reserves helps keep the revenue at the right level so that when the department does have to ask voters for a bond issue, they can pay it off and not raise rates any higher.

“If our cash reserves go down because we can’t pass needed rate increases, we’ll push off projects and that will make them more expensive in the future or we’ll deplete our cash reserves which could jeopardize our bond rating,” he said.

Treece said he has gotten complaints about the department not fulfilling its duties. For example, some customers said they got erroneous bills or disconnect notices even when they had paid their bills.

“For a lot of rate payers, their only interaction with city government is when they come to pay their bill,” he said. “If they don’t have a positive experience with that, they lose confidence other services that the city provides.”

If all rate increases are approved, the average customer will pay $3.83 more a month for utilities.

By now, it’s well known that a new software overhaul caused problems for utility customers. Johnson said they knew it was going to cause problems because of how extensive the change was but they didn’t know how big the problem would be. Right now, he said they’ve budgeted for more people working utility customer service in order to improve the quality of the service.

Even with those efforts, Treece said Wednesday he felt like they were increasing the rates for frustrated customers who weren’t getting the basic services they need.

“I’m not going to compound rate payers frustration with that system by raising their rate,” he said. “That’s coupled with the Water and Light Department being unable to produce a financial report since September of 2016.”

Treece said he needed to see a line-by-line breakdown of the department’s cash flow so they can figure out if there needs to be a rate increase at all.

According to Water and Light assistant director Jim Windsor, financial reports are not used to build their budget. Instead, they predict a few years ahead based on cost of service studies and predicted water usage.

Council members Karl Skala and Betsy Peters also wondered where those monthly reports were and why they weren’t available.

City manager Mike Matthes said the new software overhaul prevented the reports from being printed.