Rate increase proposed for sewer loan

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Pelzer Sewer Phase 2 project

By David Meade

Pelzer sewer customers are getting a long overdue upgrade to their sewer treatment system, but the additional improvements will require customers to pay more each month.

Pelzer Town Administrator Skip Watkins said the required RDA payment on the $1.5 million RDA loan is $5425 each month and will result in a $38,512 deficit in the 2015-16 budget over the coming year. A reduction in expenses and/or a sewer rate increase will be necessary for the town to cover the new loan payment, according to Watkins.

He presented three sewer rate increase options to council as part of his budget presentation during their regular monthly meeting Monday.

Watkins said the projection based budget has anticipated revenues of $905,734 and expenses of $879,588, resulting in a $26,588 postive net before adjusting for sewer loan payments amounting to $65,100.

Options presented to cover the $5425 monthly payment include: a monthly variable rate monthly rate increase of $2.64 per 1000 gallons; a fixed rate monthly increase of $10.05 per customer or a combination fixed rate increase of $1.32 per customer plus a variable based on usage at $1.32 per 1000 gallons.

The payment is based on an average of 539.8 water/sewer customers the town serves.

The monthly payment includes the original loan payment of $3568, supplemental loan payment of $1166, a loan reserve of $357, supplement reserve of $117 and a short lived asset reserve of $217.

Watkins suggested the new rate be put into effect in July.

After some discussion, Council decided to hold a budget work session to discuss the proposed rate increase options and possible reductions in expenses to help lesson the increase.

The special called budget meeting will be held at 6:30 p.m. on Monday, May 18. First reading on the 2015-16 budget will be held during the meeting.