The Highland City Council on Jan. 19 unanimously approved a three-year rate hike to pay for upgrades on the city’s aging mains and bring its water fund operating budget back into the black.
Approval came two weeks after the council unanimously rejected a plan to raise water rates over the next 10 years. The City Council and Mayor Joe Michaelis said a 10-year plan would have been too long, especially in today’s tough and uncertain economic times.
The latest proposed rate hike will go into effect with the Feb. 1 billing, said Joe Gillespie, the city’s director of Public Works.
As previously proposed, a typical single-family household, which uses 4,500 gallons of water a month, will see its monthly water bill increase by 16 percent in the first two years under the approved plan and 3 percent in the third and final year of the rate hike.
Currently, the typical household pays $27.21 for water. That same family will be paying $31.57 a month over the next year. In year two, that same homeowner will pay $36.62 a month. In year three, the price will increase to $37.71.
In addition to serving Highland, the city supplies water to Grantfork, Pierron and St. Jacob.
Gillespie said Hurst-Roche will create a water main master plan to prioritize improvements.
“Hurst-Roche will evaluate the revenue from the current water rates for consumption of water in comparison to the expenses for operation, maintenance and cost of capital improvements of the water system,” he said. “Once we get the master plan together, then we can see what kind of dollars we are matched up against.”
Some of the city’s original cast iron water mains might be close to 80 years old, if not older. The city’s last water main improvement project was in 2006.
Also, without the rate hike, the city’s water revenue fund was projected to finish the current fiscal year with a $140,000 deficit.
Gillespie said the water fund will be able to finish this year with a positive net position as a result of the rate increase.