One final reading remains of an ordinance that would increase water and sewer rates over the next five years, pending any major changes.
The Nevada City Council unanimously approved the second reading of the ordinance during their meeting Monday night, but not without much discussion. The 5 percent annual water and 1 percent annual sewer rate increases over the next five years are needed to fund capital improvement projects and maintain the city’s reserve levels in case unexpected repairs or expenses arise within the water and sewer departments.
Lynn Lathrop, representing Burke Corporation, again approached the council regarding Burke’s concerns about the proposed rate increases. Burke uses approximately 30 percent of the water in Nevada. He said the increases are "not fair and equitable" to large volume providers, such as Burke and other industries in the city.
At the last council meeting, he requested city staff meet with Burke representatives to go over the changes and what Burke believes should be done instead. City staff met with Burke last week.
As a result of the meeting, Lathrop said Burke would like the city to evaluate the impacts of the changes Burke suggested during their meeting with city staff; revise the cost of service model and impose the rates set in the 2003 cost of service agreement the city has with Burke; and impose the proposed rate increases for two years rather than five.
City Administrator Elizabeth Hansen said under Burke’s proposed changes, their sewer rates would be higher and water rates would be lower. The impact Burke’s requests would have citywide have not been calculated by the city’s engineer.
Burke also does not feel it need to contribute to capital improvement projects that do not impact the company. David Weber, president of Burke, suggested having the projects funded based on who would benefit from them.
Councilman Brian Hanson said the city has had to make improvements to the sewer plant because of all the product that comes from Burke. While Burke has contributed funds to make those improvements, city taxpayers have provided the remainder of the funds needed.
"We’ve had to improve that more than once and all the taxpayers have had to pay for it," Hanson said.
If the city makes exceptions for Burke, other industries with large water consumption rates, such as Lincolnway Energy or DuPont, may want a discount, too, Hanson said.
Regardless of whether or not the city makes Burke’s requested rate changes, Weber asked the city to impose the ordinance for two years rather than five.
"Consider that and take a look at it in another two years," Weber said.
Council passed a motion approving the second reading, giving direction to city staff to figure out the rates, based on Burke’s proposed changes, before the next council meeting. Council members also asked for staff to determine whether or not the city is still bound to the 2003 cost-of-service agreement with Burke.
Other agenda items of interest:
- An increase in compensation rates for Nevada’s volunteer firefighters was approved. Currently, volunteers are paid $5 per call. As of July 1, that rate will be increased to $7.50. In addition, volunteers will be compensated for up to 12 training events each year.
- Council awarded a contract for the construction of a new street for the Airport Road, Plat 6 Subdivision Improvement project. Of the eight bids received, council accepted the one from Con-Struct, Inc. in the amount of $1,203,000 - 35 percent below the engineer’s estimated cost of the project. The new street, which will be called West A Avenue, will serve the 100-acre subdivision along Airport Road purchased by Van Houweling (Van Wall).
- Council also accepted a bid for the 2013 Sanitary Sewer Rehabilitation Project. The contract was awarded to Municipal Pipe Tool Company in the amount of $286,385 - 11 percent under the engineer’s estimated cost. The project will line sewers and rehabilitate manholes in the following locations - 10th Street from E Avenue to H Avenue, Seventh Street from E Avenue to L Avenue, 11th Street from L Avenue to N Avenue and E Avenue from Fifth Street to 10th Street.