A public hearing will be held before the December Oberlin council meeting to discuss water and sewage rates. Mayor Larry Alexander is now working on a proposal he will introduce at the December meeting.
The council heard the results of a Louisiana Rural Water Association’s (LRWA) rate study of the town’s water and wastewater systems Monday night, November 13. Data from audits for the years 2020 and 2021 were used since the audit for 2022 is not complete. LRWA’s Tony Sonnier, water circuit rider, and James “Tee” Rider, waste water tech, presented the results.
The study involves reviewing present rates, revenue, expenditures, savings, expenses, assets, etc. in an effort to determine if the system can sustain itself with the income it has on hand. (The sustainable rate factor used is 1.15, up from the former 1.10 rate). The factor is put into the formula to make sure the system can sustain itself in case of mechanical breakdowns, etc. In water, the town is at 0.96. In wastewater, the town’s present rate is 0.83. For most grants, that factor rate would have to be at 1.15 or 15 percent to secure a grant.
In the area of water, the town is paying $12,059 per month for a USDA loan ($144,708 per year). The town has no fund set up for repairs and replacement of parts. After talking to the mayor, the town is going to put $2,500 a month into a fund for this purpose, giving them $30,000 per year. This will provide a little cushion, but it’s not enough to cover major repairs in the system.
“If anything breaks and we have no grant monies (to make those repairs), we’re in trouble,” said Alexander.
The water department revenue collected was $486,000 with $2,200 in disconnect fees for a total of approximately $488,000 with a loss of $19,000.
The only way for the town to increase its revenue is to adjust rates when looking at its present system. There are 951 residential customers with 620 residing in the city limits. There are 83 commercial customers. Today, residential customers are paying $18 (base fee) and $4.50 per 1,000 gallons used after the base fee. To be at 15 percent, the town would have to raise rates to $23.85 (base) and $5.96 for every 1,000 gallons used. Commercial rates would be $53 (base) and $7.29 per thousand gallons. This would give the town $582,000 compared to its current $486,000.
If the town had to rehab the system, it could cost a half million dollars. Everything has increased in cost-wise, and the town needs to prepare for the future.
“It (rate increase) should have been done over a period of time,” explained Sonnier.
The last rate increase was in 2017 and was approximately $5 to meet USDA terms for the loan the town secured at that time. It was mentioned once the town reached the rate of sustainability in the future, then it could use the CPI (consumer pricing index) of three percent to raise rates each year to remain where it should be in terms of keeping the systems sustainable.
The same scenario exists for the wastewater side. A current loan of $10,000 is paid each month ($121,899.96 per year). It was pointed out no salaries were coming out of these budgeted dollars in this fund, so that will have to be factored into the equation. Expenses are at $295,000 and to add salaries, benefits, etc., the wastewater expense fund would grow to $425,000.
To bring it to a point of sustainability rates would have to increase 54.5 percent. Residential rates are at $17 (base) and $4.56 per thousand used after base rates. Rates would have to be increased to $26.27 (base) and $6.95 per thousand used. Commercial rates would be $61.80 (base) and $6.95 per thousand used to bring the town to the 1.15 factor to become sustainability.
The men with LRWA reminded the council they were making recommendations to get to the sustainability factor in both water and wastewater. They were not a regulatory agency, but they were there to assist the town.
In other business, Mayor Alexander updated the council on grants. He said the capital improvement monies should be bided out by December 4, and the water sector grant of $2.8 million on November 29.
He said the town completed the KLB (Keep Louisiana Beautiful) grant. He said 30 to 40 volunteers showed up to pick up trash for about four hours. He said the town picked up about 50 to 60 bags. He said the town will follow up in the spring with more KLB projects
The mural downtown has been completed. The mayor thought a great job was done. He said the town is currently working on 17 grants and waiting for final approval in different areas.
The maintenance department has been working around town on water leaks. He said there was a big leak by the Catholic Church but there were some things inside the hole dug, so they are waiting on gathering more knowledge on the situation there until repairs can be made.
Finances are still tight, according to Alexander, but the town is meeting its bills and payroll. He said they will continue to move forward.
The council approved the finances and agreed to pay bills. The town also hired Rozier, McKay and Willis, certified public accountants.
A new item was added to the agenda. The town approved a liquor license permit for a special event at the civic center for Moma D’s Louisiana Kitchen.
