Blue Ridge, Ga. – Discussions on whether the Fannin County Water Authority (FCWA) would see a price hike has been a hot topic this year, and the Blue Ridge City Council solidified that this rate increase would take place at their Nov. 13 meeting.
Currently the FCWA purchases water for its customers from the City of Blue Ridge at a wholesale rate. This rate had been debated early this year as being under normal wholesale prices.
Rebecca Harkins, Utilities Director for the City of Blue Ridge and Alicia Stewart, the city’s Finance Director, presented to the Blue Ridge City Council a breakdown of why a wholesale rate increase is necessary.
“Earlier in the year Alicia and I have gotten to together and calculated a wholesale water rate,” Harkins said of the internal work done by the city. “We based it on our expenditures from the water system versus what our normal everyday customer paid.”
Harkins pointed out that the expenditures and data collected was based on the previous year of 2017.
Currently FCWA purchases water at a wholesale rate of $3.25 per 1,000 gallons. This rate is approximately 25.65 percent of what a consumer directly supplied by the city pays. The goal of the City of Blue Ridge is to bring the wholesale rate up to 50 percent in yearly increments.
The proposed rate increase would put wholesale prices at $4.25 per 1,000 gallons and bring the percentage closer to 33 percent.
Harkins and Stewart also had a third party rate study conducted by Phillip Reid, Georgia State Manager for the Rural Assistance Community Project. This third party review was conducted at no cost to the city.
According to Harkins, Reid looks at the percentage of water used versus the percentage of revenue and through his findings had also recommended the rate be set at $4.25 per 1,000 gallons with an increase to $5.00 per 1,000 gallons the following year.
“The only difference I came up with is that in the second year of rate increase it would look more like $5.25 if you factor in inflation,” Harkins stated of her findings.
Council member Rhonda Haight questioned the current total amount of debt the City of Blue Ridge faces in regards to its water system. Stewart replied approximately $14 million.
This debt according to Haight must be taken into consideration when negotiating rates. Haight further commented that she felt the city should not be locked into a set price with the FCWA and should be able to evaluate rates if more debt is obtained.
Mayor Donna Whitener suggested the city holding a workshop where Reid could go over all findings and explain to the public the cost of running a water system.
While contracts are still being worked through between the City of Blue Ridge and the Fannin County Water Authority, the city council did vote to raise the wholesale water rate to $4.25 per 1,000 gallons effective Dec. 2018.
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