City expected to raise water rates in new fiscal year

Published 12:00 am Friday, August 23, 2002

[08/23/02]Vicksburg’s spending plan for the new year was upstaged by a discussion of water rates Thursday night with the mayor predicting residential customers are going to have to pay more.

The $32 million spending plan for the year that starts Oct. 1 contains no changes in tax rates and drew five citizens to the required hearing at City Hall Annex.

Mayor Laurence Leyens said the plan includes $2.7 million for six new water wells and, responding to one person who said the city needed to prioritize city services and costs passed onto citizens, added that water rates may have to increase to secure a future water supply.

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“We do not have enough water supply for the community,” Leyens said. “And that means I’m going to have to raise your water rates, and I’m not afraid to say it.”

In addition to normal municipal operations, Vicksburg operates separate water, natural gas and sewer utilities that are not part of the general fund. The city also coordinates residential garbage and trash collection, billing for the service provided by private contractors.

Municipal water rates last increased in 1999 when costs for residential customers went from $4 per 1,000 gallons for the first 2,000 gallons used to $6 per 1,000 gallons for the first 2,000 used. Rates per gallon fall as more water is used.

Leyens did not say when new rates might kick in. Paul Rogers, city strategic planner, said an increase could be done without affecting minimum bills.

“The average household isn’t going to see much of an impact, maybe a dollar or two. It’s the big commercial users who are going to pay for it,” Leyens said.

He also said the improvements will reduce long-term expenses for water and keep costs down over the next 10 years.

“People who are concerned about water bills should turn their garden hoses off and fix their leaks,” Leyens said.

In previous years, the city has supplemented the cost of water through the general fund, but the budget proposal presented Thursday reflects no such supplement.

The proposal also includes borrowing $5 million to fund capital improvements at the water plant including the cost of installing new wells. The loan would have to be paid back over 15 years at about $449,000 per year, Rogers said.

Water the city sells to local and county customers is drawn from well fields near the Vicksburg Harbor. Several new wells were completed about two years ago after older ones silted in. The water is processed at the harbor industrial park and piped to storage tanks all through the distribution system.

Current rates charged for municipal water generate about $3.7 million in revenue annually. The total cost of the water department is about $8.4 million.

“We have the lowest fees in the Southeast region because we subsidize the water costs,” Leyens said.

Another area officials are looking into to reduce costs to the tax base by raising fees is garbage and rubbish collection. The proposed budget reflects a $1 million decrease in spending for rubbish collection by doing away with in-house collection and contracting out that service, but Leyens said they expect to see an increase in garbage rates sometime next year.

Garbage rates were also last increased in 1999 when rates went from $7.25 a month to $11.05.

“You need to prioritize,” said Vicksburg resident John Shorter. “If you’re going to offer city services then people shouldn’t have to pay.”

During the last administration, when utility rates were raised across the board and supplements from the general fund were reduced, there was no corresponding tax cut. Instead, that money was allocated to other expenses.

Raising rates again will free up more money for the administration to reassign.

Overall, the total spending is expected to be about $800,000 less than this year, largely due to fewer capital projects. Officials say they also plan to do away with a separate capital improvement fund set up during the previous administration in order to clean up city accounting.

The budget is expected to be approved in the next two weeks with some minor changes.

“I hope before Oct. 1 to have it reduced a little more,” said South Ward Aldermen Sid Beauman.

The proposed budget also includes pay raises for the mayor and aldermen, funds to create a countywide animal control shelter in a joint venture with Warren County and two new ambulances, one to be stationed on U.S. 61 South and the other to be stationed in Kings.

Former Mayor Joe Loviza attended the hearing and questioned the $217,000 budget for TV 23, a new item in the budget.

Vicksburg Video cable company made the channel available to the city two years ago at no charge. The city shows its board meetings and offers other productions to cable customers.

Loviza also asked officials to consider cutting taxes. “Not everyone is doing as well as we would like,” he said. “When will we see a tax reduction?”

When Loviza’s term started in 1993, the total budget was $14 million. Nine years later, the payroll portion of city spending is $18.4 million.

Leyens pointed out that city tax rates have remained unchanged for five years while school tax rates have climbed two years in a row.

Each mill equals about $1 per $1,000 of assessed property value after homestead exemptions and other credits.

The last city tax reduction was the same year a state-mandated, countywide reappraisal of property value raised tax bills for most property owners.

While city tax rates are expected to be unchanged, Vicksburg and Warren County residents will see an increase on their tax bills in December. Earlier this year, the Vicksburg Warren School District Board of Trustees approved a $62.3 million spending plan, which includes a $1.2 million increase in local funds.

Warren County tax rates are also expected to remain the same.

By law, city and county officials must have their tax rate set by Oct. 1 and boards here usually complete the process in mid-September.

Schools held their budget hearing in June. Supervisors have not set a date for theirs.