Villa Rica Mayor Jeff Reese on Tuesday rescinded a veto involving new city utility rates for senior citizens, allowing rate hikes for all city residents to go forward as scheduled in February.
The rate increases are an integral part of the city budget adopted by the City Council on Dec. 5, providing additional revenues meant to stop the subsidy of the city’s water-sewer fund by other city funds. Reese issued a veto on Dec. 13, putting the new rates on hold.
With the recision of the veto, however, the new rate schedule will go ahead as planned, and be effective in February. The rates for water, sewer, sanitation and solid rates will impact all customers, regardless of senior status, although some seniors will be eligible for an income-based discount.
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.
On Dec. 13, Reese issued a veto on two portions of the $20 million budget adopted the previous week by the council. One involved the rate increases, while the other veto involved an allocation of $45,000 to address pay parity issues for some city employees.
His decision on Tuesday to rescind the rate hike veto makes it unnecessary for the council to meet to override that decision. The council will, however, meet in the New Year to take up the pay parity matter.
Overriding a veto requires four votes from the five-member council — a “super-majority” that is one more than the simple majority required to pass a measure.
In a letter Tuesday to City Clerk Alisa Doyal, Reese wrote that his decision to rescind the rate hike veto was the result of discussions with city staff and “the development of an additional procedure that should determine the number of seniors who might qualify, if the exemption were adjusted higher based on need.”
Currently, all seniors age 65 or older are entitled to a discount on their water and sewer bills. But with the new budget, the discount would 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.
The $24,120 figure is based on two times the poverty level. In his veto message of Dec. 13, Reese said he was concerned that the rate hikes would mean some seniors would pay much higher rates than they do now. In his letter on Tuesday, Reese said he had wanted to ensure the number of discounted seniors would be adequate.
“My intent all along was to determine if that $24,120 exemption was set at the number council intended and, furthermore, to determine how many seniors would qualify as it was approved. As I have stated publicly, I am in full support of the need for changes in our rates to ‘right the ship’ and I maintain that belief.
The rate hikes had been integrated into the budget as a means to make the city’s water, sewer and sanitation services pay for themselves, rather than be subsidized by other city revenues. As things stand, those dollars are being diverted from other things needed by the rapidly growing city — such as more police, improved infrastructure, community development and administrative costs.
Another part of the planned rate hikes requires that all city customers pay for household garbage pickup, even if they have not done so before.
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. The result is that the city has consistently lost money.
While city officials have acknowledged 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 his letter to City Clerk Doyal, Reese said on Tuesday that his veto of the rate-hike portion of the budget was not an attempt at “grandstanding.”
“However, I do feel that if I am not in agreement with a decision approved or, if as in this case, information is brought to my attention after a vote is taken that I feel sheds new light on the issue, I will exercise the right to veto.”
With the new budget, the city planned to spread those increases over the next three years — or until the year 2020, when the bond payment increase is scheduled to hit. This means that city customers could expect another rate hike next year, and possibly another the year after that.
However, during a Nov. 30 work session with council, City Manager 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.