Madison raises sewer rate 10 percent

The Madison Board of Aldermen followed a silent public hearing Thursday evening by unanimously approving a nearly $6.2 million total budget package for 2008-09.
The only rate increase adopted for next year is a 10 percent rise in the town’s wastewater treatment rate. The increase was part of an attempt to reduce a growing deficit between revenues and expenditures in the town’s water and sewer budget.
Water and sewer revenues for the 2008-09 budget were predicted to be a little above $1.5 million, but expenditures figured at nearly $2 million.
The shortfall would be supported by a $164,085 appropriation from the water and sewer fund balance and a contribution of $237,000 from the general fund.
Town Manager Bob Scott told board members that wastewater treatment costs increased by 91 percent since the town’s last rate hike, which was in 2003.
“Our cost has gone up from 81 cents per 1,000 gallons to $1.55 in three years,” Scott said. “But we’ve absorbed the increases without passing it along to our customers.”
The board decided it would be easier to make small adjustments now instead of waiting until the shortfall required a large increase in rates.
“When your expenses keep going up but the revenues don’t, the problem just keeps getting greater,” Scott said.
Cost increases without rate increases created an annual shortfall of about $282,000 between sewer revenues and expenses. An increase of just 10 percent in the sewer rate would generate about $60,000 in additional revenue.
“That would decrease our use of fund balance by that amount this year alone,” said Alderman Leon Wall.
The board voted unanimously to increase the sewer rate by 10 percent beginning July 1. The increase would raise the average Madison customer’s bill about $5 every two months.
An overall general fund budget of $3,345,740 balances without a tax rate increase, but it requires more than $600,000 from fund balance to offset deficits created by lower tax evaluations and decreased interest earnings.
“We’re fortunate to have built a substantial fund balance through the years, but the board didn’t want to appear to be sitting on taxpayers’ money,” said Scott. “Since our fund balance was well above the state average, they thought it would be a good time to use some of that to take care of a few things that have been put off for several years.”
Board members supplemented the budget proposal presented Thursday with additional funding from the town’s $1.7 million general fund savings.
Alderman Monte McIntosh recommended taking an additional $241,020 from fund balance and $35,000 from capital equipment reserve to fund several items on a priority list.
“That would be the maximum amount spent from fund balance and just on items from that list over the next 12 months,” McIntosh said.
Among capital items included in the new budget are a service truck for public works and several smaller items and equipment. The town will also refurbish a river pump and buy a raw water flow meter for the water treatment plant. A total of $38,000 will be used to buy a generator that will complete the booster pump station for the new water tank on U.S. 311.
“We also plan to replace a water line on Shale Road, which will improve water service and pressure to that area and also provide much-improved fire protection,” Scott said.
The budget also includes $115,000 for the removal of alum sludge at the water plant – another project that has been removed from the budget in previous years.
The budget allows for the employment of one additional police officer to assist with issues related to drugs and gang activity.
The 2008-09 budget implements the new employee salary plan recently approved by the board of aldermen, placing all town employees into the proper classifications with salary adjustments. After the adjustment, all employees will receive a 4 percent salary increase.
The board increased the annual contribution to the Madison-Mayodan Recreation Department by $5,000 to $147,000.
Also part of the nearly $6.2 million total budget package are: $38,200 in the special police fund, $8,690 in a police anti-drug fund, $13,860 for the historical and preservation fund and $39,000 in a capital equipment reserve fund.
There is also a $770,000 budget for the single-family housing rehab program. This amount includes a $70,000 matching fund contribution from the town for a $700,000 Community Development Block Grant. The funds are used to replace insufficient sewer lines, make street improvements, improve flood and drainage issues and do rehabilitation to single-family residences.

News Editor Steve Lawson can be reached at slawson@reidsvillereview.com.