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Thursday, May 26, 2016

Purdy Council to raise utility rates due to lawsuit

Thursday, July 2, 2009

Utility rates are going up for Purdy residents as a result of a lawsuit over the city's two sales taxes.

Last week the Purdy City Council adopted its budget for the fiscal year beginning July 1. The budget called for a major restructuring of the way the city pays its personnel, pushing most of the burden off the sales-tax-based general fund and onto the utilities.

A lawsuit and court injunction has left the future of half of Purdy's sales tax income in question. Rather than wait for the court case to be settled, city officials had to budget for the year ahead, with the new fiscal year starting on July 1.

Clerk Debbie Redshaw calculated an average monthly sales tax disbursement over the past year, then estimated how much sales tax income might come in if the city lost its second tax entirely. Her formula predicted sales tax income would drop by 29 percent.

Redshaw suggested shifting three-quarters of the money spent out of the general fund for salaries over to utilities. Much of the city clerk's job involves billing and processing water and sewer bills, and the clerk's salary is already divided between the general fund and the water and sewer budgets.

The new budget did not call for changing the base rate for selling 3,000 gallons of water. For sales of higher volume, a 3 percent increase was proposed.

The water rate increase was figured to boost fee income by 45 percent. The amount committed to paying salaries could double.

The proposed sewer rate increase called for raising the base price by $1, plus increasing the cost of every subsequent 1,000 gallons by an additional 75 cents.

Boosting the sewer rate had to serve two purposes. In addition to covering the city clerk's pay, the increase also has to cover a $1-per-hour increase for the sewer operator, who will complete certification for his sewer operator license in the coming year.

The sewer rate hike would increase money available for salaries by 39 percent. No other raises for any positions were planned.

Implementing the water and sewer increases will require new ordinances, which will not be ready before the July billing cycle. Redshaw expected to have ordinances putting the rate increases in place for the July 13 meeting.

Income in the budget is projected at $150,100, a 20 percent drop from the previous fiscal year. Redshaw anticipated franchise fees, property taxes and court fines would all grow in the coming year.

The new equipment scheduled for purchase in the past year for the park would stay on hold so park spending would match income. Most income for the park comes from rentals on the community building. The street department budget was almost unchanged on the bottom line but called for much higher spending on maintenance and repairs. The savings came from less spending on fuel, in light of lower prices since the previous year's budget was prepared.

The new budget called for putting $45,020 into a reserve fund to cover the cost of a new utility truck and unforeseen expenses. The $29,000 payment for professional services, covering the lease purchase on the water tower, is in line with what the city has been paying for a number of years.

Nearly $17,000 in sewer spending is planned for professional services, compared to none in the current year. The additional spending is to cover engineering services with Allgeier, Martin and Associates for state-mandated improvements on cutting storm water inflow into the sanitary sewer system.

"The city is planning for the worst and hoping for the best," said City Attorney Don Trotter.

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