Fairhope considers hike in sewer service fees

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FAIRHOPE – City officials are scheduled to consider a proposal Monday, July 27, to increase sewer rates over the next three years.

Revenue from sewer charges now covers less than three quarters of the cost of services, Michael Allison, operations director for Fairhope Utilities said at the last City Council work session.

“We recently had a cost of service study completed by Jackson Thornton,” Allison said. “We were significantly underfunded in our wastewater department about 72 percent of where we needed to be, so for every dollar that we needed to operate, the utility, we were taking in approximately 72 percent.”

The Utilities Department pays the sewer service deficient with revenue from water sales, Allison said.

At the work session, council members asked Allison to prepare an ordinance that would balance revenue and costs over three years.

“We were running at about a 28-percent deficit and this gets us, over a three-year period, back at 100 percent including the necessary funds for upkeep and maintenance,” Councilman Jay Robinson said.

The current basic rate $16.04 for services inside Fairhope. That rate includes the first 2,000 gallons of water used by the customer. The charge for additional use is $4.24 for each 1,000 gallons used.

For Fairhope Utilities customers living outside the city, the basic charge is $18.42 and $5.22 for each additional 1,000 gallons.

“It costs more to serve customers farther get away from city of Fairhope,” Allison said.

Customers outside Fairhope also use more water. The average use inside the city limits is about 5,000 gallons. Outside the city, the use is about 7,000, Allison said.

When the total use is added in, the average cost for sewer services in Fairhope is $28.77 inside the city and $44.52 outside the corporate limits.

The study included two optional recommendations.

The first option would raise revenue by charging for all use and eliminating the 2,000 gallons now provided at no charge. Revenue from that plan would raise about 89 percent of the cost of services, Allison said.

The second option would also charge for all use but would also increase charges. Under the second option, the total for use inside Fairhope would increase $14.98 a month to $43.75.

Outside Fairhope, the average estimated cost would be $65.25, an increase of $20.73.

The study called for either option selected by the council to be imposed over two years.

Council members asked Allison to prepare a draft that would impose increases over three years, rather than the two proposed for the second option by the study.

In the first two years, the free usage would be phased out. After two years, officials would look over the difference between costs and spending and determine what changes would need to be made in the third year.

Each annual change would go into effect on Oct. 1.