The city’s utility rates will be the topic of study by a 10-member committee appointed Wednesday by Mayor George Flaggs Jr.

The committee is composed of city accountant Doug Whittington, city clerk Walter Osborne, water and gas administrator Tammye Christmas, public works director Garnet Van Norman, water and gas supervisor Dane Lovell, city attorney Nancy Thomas, accounting department employee Kathy Allen, sewer department manager Willie McCroy, wastewater treatment plant supervisor Mark Engdahl and Eddie Busby, ESG operations representative at the water treatment plant.

“Utilities are a fee for service,” Flaggs said.

“I’ve been saying all along that it’s costing us more to provide the service than I originally thought, so we’re trying to make certain we’re charging the right amount.”

He said the increase in the cost of providing water service plus the cost of installing upgrades and expanding the city’s water treatment plant on Haining Road are the main reasons for examining the present rate structure.

Flaggs indicated in February the Board of Mayor and Aldermen could at some point have to consider a utility rate increase.

“I’m just putting the city on notice, because if you’re going to grow and expand the way we’re talking about growing and expanding and developing the city around it, we’re going to have to put some money out as relates to water treatment and wastewater in this city, because we’re at a breaking point,” he told the board at that time.

“I’m trying to get the mindset of the public and the citizens to understand that a rate increase may be around the corner for somebody.

“I don’t see how we can continue to improve the quality of service and meet all of these decrees at the same cost,” he said. “It’s just impossible.”

City water bills are based on use, with residents paying a minimum of $8.75 for the first 2,000 gallons used and $3.22 per 1,000 gallons for the next 8,000 gallons used. A sliding scale is used to determine the cost per gallon for use more then 8,000 gallons.

Commercial users pay a minimum of $35.80 for the first 4,000 gallons, and $4.25 per 1,000 gallons for the next 8,000 gallons used. Like the residential rates, use over 8,000 gallons is determined using a sliding scale.

Sewer rates are based on water use. Residential customers inside the city pay a minimum of $12.90 ($6.45 per 1,000 gallons) for the first 2,000 gallons and $3.60 per each 1,000 gallons after 2,000 gallons. Residential customers outside the city limits pay $25.80 for the first 2,000 gallons and $7.20 per each 1,000 gallons for each 1,000 gallons over 2,000.

Commercial customers inside the city pay $28.25 for the first 2,000 gallons, and $3.60 per each 1,000 gallons for each 1,000 gallons over. Commercial customers outside the city limits pay $56.50 for the first 2,000 gallons and $7.20 per 1,000 gallons for each 1,000 gallons over 2,000.

All customers also pay a $5 EPA fee approved in 2015 to help cover costs for upgrading and repairing the city’s 110-year-old sewer system.

In December, the board approved a contract with Houston, Texas-based Water Company of America to perform an audit of the system to find users who aren’t paying their fair share for what they use.

Under the agreement, once the auditors discover an unbilled use in the city, they send the discovery to the city’s utility billing department.

The company is paid only if they find unauthorized use.