Council passes first of three readings to increase utility rates

The Prairie City City Council passed the first of three readings that would bump up residents’ utility rates.

The council passed the reading 4-1 during its monthly meeting April 11 at city hall. If enacted, the slight rate hikes would affect Prairie City residents’ water, solid waste and sanitary sewer bills.

Prairie City sewer customers would see a 3 percent increase in their monthly bill under the proposal. That translates to roughly a $1.21 per month increase for the average household.

Water rates would increase by 2 percent, 50 cents more per month on average, while garbage collection will increase by 3.5 percent. Depending on the size of a resident’s waste can, that averages between a 37 cent to 52 cents per month rise in cost.

In total, city officials expect residents would see a total city utility cost increase between $2.12 to $2.27 per month. The council needs to pass two more readings for the ordinance change to take effect. The next vote is scheduled for the council’s May 9 meeting. The rate changes would begin July 1.

Matt Stoffel of PFM Financial Management represents Prairie City’s financial advisement firm and broke down the proposed increases for the council in February. Stoffel said the 2 percent water increase is to keep prices in-line with inflation.

Prairie City’s garbage and recycling collection contract with Waste Management has an automatic annual 3 percent increase, and Stoffel is recommending the extra .5 percent in case of unexpected costs such as waste can replacements.

The 3 percent sewer increase, Stoffel said, is so the account can both cover operating costs and keep a cash balance reserve. Prairie City is required by the state of Iowa to keep the fund at 110 percent of its annual debt service loan payment in the sewer fund, a loan taken for the wastewater treatment facility’s construction five years ago.

Although the rate increases will likely pass, there was one dissenting voice on last week’s first reading. Councilman John Lee was the only no vote. Lee is worried projected annual utility rate increases over the next five years could snowball to a 20 to 25 percent utility cost increase from the 2017 level. He also argued the percentage of city employee salary costs coming from the sewer and water enterprise accounts is too high.

Portions of the public works and city hall staff’s salaries are routinely taken from the accounts based on the number of hours they spend working at the sewer plant or on utility billing paperwork.

“I’m totally opposed to this. ...The question I asked about before is to see if there are ways we can look into this budget and overcome that,” Lee said. “With these proposed rates that you’re talking about it comes to a total of about $3 per month per household. Not a lot of money, but it’s an $18,000 tax on the citizens overall.”

Lee said he’d like to see more salary come from the general fund, which is supported primarily by property taxes. This is a criticism former councilman Lyle Burkett raised in the past, but police chief and interim city manager Joe Bartello rebutted Lee in the meeting and said a smaller percentage of the salaries are coming from the enterprise funds in 2018-19 than last fiscal year. Bartello said he feels the hours logged by city staff at the water and sewer plants are accurate.

Contact Mike Mendenhall at mmendenhall@myprairiecitynews.com