Vicksburg’s utility rates are insufficient to meet the needs of its utility systems and should be increased to adequately fund the present and future needs of the systems, according to a report on the city’s utilities and rate structures.

The report prepared by Jackson engineers Allen and Hoshall was presented at a Monday work session of the Board of Mayor and Aldermen.

Mayor George Flaggs Jr. has appointed a committee of Public Works Director Garnet Van Norman, City Attorney Nancy Thomas, City Clerk Walter Armstrong, City Accounting Director Doug Whittington and water and gas manager Tammy Christmas to review the report and present its findings to the board at its first meeting in January.

“We really don’t have much choice, we’re going to have to raise the rates,” said Van Norman, who is chairing the committee. “ When you compare our rates with other cities our size, we are out of range. Even Culkin (water district) is higher.

“We don’t have enough surplus to handle infrastructure needs. The way our water rates are set, you pay less money for using more water. That’s not right. The more water you use, the more you should pay. The sewer system is losing money, and we have to increase its income to pay for the EPA (Environmental Protection Agency) mandates.”

The city is under a consent decree with the EPA for allowing raw sewage to be discharged into the Mississippi River and other streams. The city is required under the decree to assess, upgrade and replace its 107-year-old sewer system within 10 years.

Vicksburg currently has 10,000 water customers and 6,800 natural gas users.

According to the report, the city’s present utility rates generate enough income to cover the systems’ daily costs of providing service, but “the existing rate structure really does not adequately fund the real costs of producing and treating water and wastewater when capital costs for infrastructure is needed.

“It would be sound fiscal policy,” the report continued, “for the city to charge enough selling water, sewer and gas to provide funding for emergency expenses and future improvements to the utility system.”

The report includes a series of rate increases for water and sewer service and an increase in tapping fees, which are charged to connect residential and commercial lines to city water, gas and sewer lines.

The gas rates, according to the report, are sufficient to cover the system’s operating expenses and should be kept at their current levels.

“The gas rates are fine,” Van Norman said. “Because they adjust with the market price.”

Currently, the city charges residential water customers in the city limits $8.75 for the first 2,000 gallons of water used. The rate decreases as the amount of water used increases, ranging from $3.07 per 1,000 gallons used up to 10,000 gallons, and $1.50 per thousand gallons for using more than 1 million gallons.

Separate rates are charged for residential customers living outside the city and for commercial customers.

Water user fees start at $12.90 for the first 2,000 gallons and $3.60 per additional 1,000 gallons used. The rate is doubled for customers outside the city, and a higher minimum charge for commercial users, although the rate above the minimum charge is the same as residential users in the city.

By comparison, according to the report, Brookhaven charges a minimum residential water rate of $11.45 for the first 3,000 gallons used, while Clinton charges $12.45 for the first 2,000 gallons and Culkin $32 for the first 3,000 gallons used. Edwards charges a minimum of $19.26 for 2,000 gallons, while Hattiesburg charges $11.03 and Natchez $10 for 2,000 gallons. Vicksburg has the lowest minimum rate of the seven systems.

The city’s sewer rate is the highest of six cities surveyed, with Brookhaven the next highest at $11.40.

“We’re going to sit down and study the report and the rates and see what kind of recommendation we can come up with,” Van Norman said. “The one thing we know is we’re going to have to raise the rates. We don’t know how much.”