Villa Rica residents will see their rates for water, sewer and sanitation services increase starting Feb. 1, when a new fee system goes into effect.
Also going into effect that date are new qualifications for senior citizens seeking discounts on those rates, as well as a new rule requiring all city utility customers pay for household garbage pickup, even if they have not done so before.
The aim of the price increases is to make those city services pay for themselves, rather than be subsidized by tax revenues. As things stand, those tax dollars are being diverted from other things needed by the rapidly growing city -- such as more police, improved infrastructure, community development and administrative costs.
The new fees are integral to the $20 million budget adopted by the city council on Dec. 5. They are also part of a plan to phase-in higher fees over the next three years, meaning city residents can expect another rate hike next year.
According to city staff, residential customers who use 2,500 gallons of water per month will see an increase in their city bills of $8.05; customers who use 3,500 gallons will see a $10.11 increase; and those who use 4,500 gallons a month will see an increase of $12.17. The city estimates that an average customer uses 4,500 gallons per month.
These customers are those who use water, sewer, sanitation and solid waste (household garbage pickup) services.
There will also be a change in how discounts on city services are applied to senior citizens.
Currently, seniors aged 65 or older are entitled to a discount. But beginning Feb. 1, the discount will be available only to those who have a maximum household income of $24,120 or less, and who are the primary titleholder or leaseholder on the property. All other seniors will pay the same rates as non-seniors.
Seniors use less water than other customers. The city estimates that low-income seniors who use 2,500 gallons per month will see an increase of $8.93 in their bills, while those who use 3,500 gallons per month will see an increase of $10.99.
Also beginning Feb. 1, all customers will be required to pay for household garbage pickup.
The company that provides for pickup, Waste Industries, charges per each container it picks up and bills the city accordingly. But the company has also been raising its rate each year, based on the Consumer Price Index, while the city's fee has remained the same, meaning that the city has consistently lost money.
Complicating that fact, around 370 customers pay for solid waste pickup only, while an estimated 150 people are having their garbage picked up without the city paying for it. In calculating their budget for the 2018 fiscal year, city officials recommended that all customers pay for the garbage pickup as a way for the sanitation service to pay for itself.
While city officials acknowledge that the increased bills will impact all families of all incomes, they say the increases are necessary. They say the new fees will stop the subsidy of city services with the cash the city needs to run the rapidly growing city -- and thus prevent a potentially large property tax increase.
All city utility services are so-called "enterprise funds," which are supposed to generate their own operating capital, just as if they were private businesses. But because all these services -- especially on the water-sewer side -- do not generate enough revenues through fees to pay for themselves, the city has had to shift money from its general fund to support them.
The situation is more acute with the water-sewer enterprise fund, in part, because a portion of its revenue is supposed to be paying down the $34 million revenue bond that built its second wastewater treatment plant. The city now shells out $1.7 million a year to make that payment, but in 2020 that bond payment soars to $2 million.
At that point, city officials estimate the city will either have to raise property taxes or start cutting back on other city services -- such as police and other administrative functions -- at a time when growth in the city puts even more demand on those functions.
In 2017, the city contracted with Raftelis Financial Consultants, headquartered in Charlotte, N.C., to study how the city's various utility rates should be raised to make them self-sustaining. After several months of review, the company recommended that water revenue needs to be raised 20 percent; sewer revenue raised 75 percent; and sanitation and waste revenue increased 32 percent to afford the costs of providing those services.
The city plans to spread those increases over the next three years -- or by the year 2020, when the bond payment increase is scheduled to hit. This means that city customers can expect another rate hike next year, and possibly another the year after that.
However, during a Nov. 30 work session with city council, City Manager Tom Barber said that the anticipated growth in the city population -- along with the increased number of people using city services -- could mean a third-year increase in fees can be avoided.