Richmond Hill City Council voted unanimously Tuesday to raise water and sewer rates for the city’s roughly 4,800 customers beginning in January, blaming the increases on state mandates and a potential shortfall of $25 million in the city’s coffers in a decade.

The hikes will raise base rates from $12.50 for water and $12.50 for sewer to $16.50 for water and $16.50 per sewer, an increase of $4 a month for each. It will also cost users who use more water more money in the future and connection fees are also going up.

The rate hikes are aimed at helping the city build both its new $24 million wastewater treatment plant and avoid a projected $25 million shortfall by 2025. Another rate increase will take place in 2016.

In a prepared release issued after Tuesday’s meeting at City Hall, city manager Chris Lovell said the state’s mandate that the city build a new wastewater treatment plant is to blame.

“The city is under a mandate and a consent order to upgrade our water system. Many may think this is due to our years of exponential growth, however, our water system would have to be updated to meet compliance even without an increase in population,” Lovell was quoted as saying in the press release. “While water rates will see an increase due to this mandate, it is our mission to make the increase as fair as possible. This system update will not only meet current regulations, but will poise our great city for the future.”

The city recently hired the engineering firm of Hussey, Gay, Bell & DeYoung to study a way to make the city’s water and sewer system pay for itself, something it hadn’t been doing in recent years, according to engineer C.J. Chance, who presented the study to council members in October.

Among the details:

A second base rate hike for residential customers will take place in 2016, when water will go to $20.50 a month and sewer will each go to $20.50 a month, or $41.

Commercial base rates also will increase, from $31 a month for water and sewer combined to $39 a month beginning in January. The rate for water and sewer combined will go up to $47 in 2016 under the proposal. Consumption fees will go up in an effort to encourage conservation, Chance said.

“The objectives of the water sewer rates is one, to pay for the cost of operation,” he said. “And also to encourage water conservation. If Richmond Hill wants to remain a viable and forward thinking community in EPD’s eyes, then having those increasing block rate structures in place (will help).”

The average use of water and sewer per month for a residential customer in Richmond Hill is about 5,000 gallons, while the average commercial customer uses about 20,000 gallons, according to data presented at the October hearing.

According to Chance’s presentation, the average water and sewer bill for residential customers will go from $44 a month this year to $56.50 next year and $73 in 2016. The average commercial customer’s water bill is currently $131 a month, he said, and it will go to $157 beginning in January and $199 per month in 2016.

Connection fees for new customers will go from $4,672 per connection to $6,400 beginning in January.

The rate increases aren’t the first in recent memory. The city just increased its rates this year for residents and commercial customers alike, and the costs have gone up each year since 2010. Then, a residential customer paid a combined monthly base charge of $9 for water and sewer service, while commercial users paid a combined $15 for both.

Despite the hikes, the city’s water and sewer fund ran deficits in recent years and had to use money from other funds – Chance mentioned SPLOST – to “supplement” its operations.

City council members didn’t seem happy about the increase Tuesday, but “we really don’t have a choice,” Mayor Harold Fowler said.

Even with increases, the city’s rates will be competitive with other municipalities surveyed, officials said. Without them, the Richmond Hill’s “deficit would be astounding and other city services would suffer greatly,” Lovell is quoted as saying in the release.

“As stewards for the city of Richmond Hill, it is our job to comply with all laws and manage the city’s resources wisely.”

After 2016, Richmond Hill will reevaluate rates yearly and they could either increase or decrease, the press release said.

Background

Richmond Hill is also planning on building a water tank and meter reading system, the study said, expected to cost about $3 million.

But the big ticket item is the city’s new water reclamation facility at Sterling Creek, which is under construction now and apparently could be finished and operating next year.

The facility is expected to cost anywhere from $22 to $24 million when complete and is the single largest expenditure in the city’s history. It was mandated by the state Environmental Protection Division due to repeated problems with spills at the old Sterling Creek treatment plant, which was built in 1996 and used a constructed wetlands process to treat effluent. As recently as 2007, the plant was winning awards, but by 2008 Richmond Hill had to settle with the EPD and sign a consent order to keep it operating, and the city’s since paid tens of thousands of dollars in fines and continues to write checks to the EPD for violating its discharge permit.

“You had no choice whether to build the plant,” Chance noted. “You do have to pay for it.”

Despite the hikes, the city’s water and sewer fund ran deficits in recent years and had to use money from other funds – Chance mentioned SPLOST – to “supplement” its operations.