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Water bill still rising?
Higher cost of chemicals projected to bring budget shortfall, possible fee rise
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Published: August 18, 2008
The rising cost of chemicals is putting the squeeze on the water and sewer fund of the City-County Utility Commission.
The result for consumers could be no break in rising water and sewer costs.
Earlier this year the City-County Utility Commission approved a 7 percent increase in water rates and a 9 percent increase in sewer rates that are scheduled to go into effect Oct. 1.
However, those rates were set before the commission approved new chemical contracts in June that are projected to cause a budget shortfall of about $760,000. Water and sewer rates are usually adjusted only once a year.
David Saunders, the utilities director, said Friday that the rising costs could end up pushing the division's annual chemical expenses almost $1 million over budget.
Saunders said that although raising rates again to cover the higher costs isn't something he and other division officials plan to ask for immediately, they aren't ruling out the possibility that a midyear increase in rates might be needed.
"As our costs go up, our ability to hold down rates certainly diminishes," Saunders said.
Council Member Wanda Merschel, who heads the city's finance committee, said last week that she is dismayed that there's already talk of a new rate increase.
"I realize nobody has future vision," Merschel said. "The thing that concerns me most is that there are ways to manage revenues and expenses that aren't always based on fee increases.… I would suggest we look at other options."
The chemicals play important roles in keeping water pure, utility officials said. They include liquid aluminum sulfate and ferric chloride, which help remove sediment and impurities from the water. Caustic soda is used to adjust the acidity of the water, and sodium hypochlorite is a disinfectant.
The water is fluoridated with fluorosilicic acid, and zinc orthophosphate is used to prevent lead and copper from leaching out of home plumbing and fixtures.
The cost of individual chemicals used has increased from 7 to 137 percent compared with last year, with zinc orthophosphate going up the most, said Ron Hargrove, the deputy director of the utilities division.
He attributed the price increases to the world economy.
"The demand is high for all the various uses, and municipal governments make up a small percentage of the world chemical market," Hargrove said. "We are a small player in a big market and we have to suffer through that volatility. We are a little bit at the mercy of vendors. We have to have the chemicals because we have to have the service."
Hargrove said that as a stopgap measure, the utilities division filled up some spare tanks with zinc orthophosphate at the old contract price before the new contract went into effect July 1.
The zinc orthophosphate contract is for only six months, and the other chemicals were bought on 12-month contracts.
■ Wesley Young can be reached at 727-7369 or at wyoung@wsjournal.com.
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