The Mobile Area Water and Sewer System board passed a budget Monday that included a 5 percent rate hike for customers and a 2.5 percent raise for employees.
The rate hike will go into effect Jan. 1 and is the latest increase related to a five-year plan the board passed in 2012.
MAWSS operates on a calendar year and not a normal fiscal year.
MAWSS Director Charles Hyland said the hike would help the system fund capital improvements needed for its aging infrastructure. The rate hike will also pay down debt service on the Williams Wastewater Treatment Plant, Comptroller Sally Berry reported.
Berry said the rate hike doesn’t really equate to a 5 percent increase because the $2 MAWSS charges for an administrative fee on each bill will not increase. The hike represents an increase from $16.05 to $16.75 per month for water for the average residential user and an increase from $34.90 to $36.55 per month for sewer for the average user. Base water rates have increased more than a dollar per month for an average user of about 5,000 gallons since 2013. Sewer rates have increased more than $3 since that time.
Next year, rates are expected to increase again to $17.50 for an average residential user of water and to $38.30 for an average user of sewer. It will mark the end of consecutive rate increases the board approved in 2011.
The raises meanwhile, are cost-of-living based and not merit based, Hyland said and amount to $596,000 in the system’s operations budget. Labor costs in the budget increased $277,925.
Board member Barbara Drummond questioned MAWSS only giving a cost-of-living raise and not a merit raise. She said a cost-of-living raise penalizes employees who go above and beyond the call of duty. She asked Hyland if a merit raise would be added to the budget at a later date. Hyland said he hadn’t considered adding one back in.
He said in order to keep the cost of operations down to maximize the rate increase, MAWSS couldn’t afford both merit and cost-of-living raises.
The rate increase adds to a total revenue of $100,510,000. Revenue for MAWSS increased $4.7 million over 2014. Water charges will make up $35.7 million of revenue. Sewer charges will make up the bulk of the revenue, or about $56.8 million.
The board will spend $57.1 million on operations and transfer $18.3 million for capital improvements, an increase of about $4 million over capital transfers last year. The remainder will be used to pay off debt, Assistant Director Les Brown said. He added that capital improvements would equal about $25 million a year for the next 10 years.
Expenditures in the operations budget increased by $700,000. The bulk of the increase came in the form of contractual services, which amounted to $438,000, Hyland said. Supplies and materials are expected to decrease by $16,536, he said, due to falling gas prices.
“We have benefited from lower fuel prices,” he said. “We hope it holds out. It’s projected to hold out for at least the first half of the year, but that can change.”
There is money in the budget for a redesign of the MAWSS website, Hyland said, to make it more user-friendly. There’s also $100,000 for street repairs and $50,000 for meter replacement.
Hyland said MAWSS staff would make an effort to decrease the operations budget by 5 percent throughout the year.
“I think it’s a good budget,” he said. “It’s a budget that helps us move in a direction that we talked about in 2012.”
In other business, the board voted to buy a degritter pump to replace an older pump at the Wright-Smith Wastewater Treatment Plant for $45,800. Weir Specialties had the only eligible bid for the pump.
The board also approved an annual contract for access roads for construction and sewer easement maintenance with James H. Adams and Son at $1,068,000. The board approved an annual contract with Smith Industrial Services in the amount of $847,710 for cleaning and video inspection of sanitary sewer segments. The board also approved a $469,630 annual contract with Slaughter Construction for manhole rehabilitation.
Before it’s regular meeting Monday, the board opened bids for two new projects. The first was for an emergency raw water backup treatment system at the Stickney plant. Two bids came in for the project and the lowest came from G.A. West and Company for $301,607. The estimated cost of the project was $240,000. No vote was taken.
Bids were also opened for an annual contract for hauling and disposal of treatment plant sludge. Three bids came in for the work and the lowest belonged to Denali Water Solutions at $805,920. The bid came in lower than the original estimate of $1 million. No vote was taken.
This was the last scheduled meeting in December. There will be two meetings in January. One on Monday, Jan. 12 and the next on Monday, Jan. 26.