City Council OKs water-rate hike
The price of water is going up.
The Tonganoxie City Council Monday approved a water rate increase that will mean customers will pay about $50 more a year, starting in February.
The council approved an additional $3 debt service charge and a 35-cent increase for each gallon used. The additional revenue will be used to repay the principal on water revenue bonds issued in 1997.
The bond issue allowed the city to make improvements on the water system and to build a new water tower.
When the bonds were issued, the city raised the rates to cover the interest charges. In 2000, the city will begin to pay back the principal, which totals about $1.5 million, according to Chris Eppley, city administrator.
The city plans to re-evaluate the charges once the principal is paid.
"We will reduce debt service and the rates accordingly once debt service is paid," said Chris Eppley, city administrator. "We will not unnecessarily have inflated rates."
The principal will not be retired until 2016. So, it is hard to know what the rates will be at that point, Eppley said.
The debt service, operation and maintenance charge is $2 and will increase to $5. This should be adequate to repay the debt charge of $4,650 per month plus the costs of billing, collection and administration.
The price per thousand gallons of water used will increase by 35 cents. For the first thousand gallons of water used, the charge will be $5.65 and for each thousand gallons after that, it will be $3.35.
An average water customer uses about 4,000 gallons of water each month, according to Eppley. This means that the average bill will increase by about $4.40 a month.
In other business, the council agreed that the city will purchase a Pelican P Single Street Sweeper. Mayor John Franiuk planned to sign the lease purchase agreement Tuesday through First State Bank and Trust. The city is getting a new street sweeper for the demonstration price, about $78,500. Originally, the city had planned to purchase the demonstration sweeper, but it was sold.