A study of the village of Archbold water and wastewater systems has shown that rate increases of 8% for water and 13% for wastewater are needed to maintain the two systems.
Archbold Village Council was given that information at its Monday, May 1 work session.
Presenting the information was Tim Warren, a senior engineer with Jones & Henry Engineers, Toledo.
Council approved the study at a cost of $25,000 at its Feb. 6 meeting.
Since 2010, council has raised water rates small amounts every year, ranging from a low of 2.2% to a high of 5.9%, to avoid having one large rate increase.
Wastewater treatment rates, which are based on water usage, were raised once in 2010, then not again until 2016, when rates were hiked by 9.6%.
Warren explained most of the 9.6% hike resulted from an increase in the minimum service charge.
The two systems have been hit by one major issue.
Since 2010, the sale of water to customers has decreased by 32%, from about 550 million gallons of water per year to about 434 million gallons.
Warren said when water sales decrease, revenue decreases.
To continue operating the plants while dealing with decreased revenue, the two facilities have had to draw money from their fund balances, or reserve accounts.
In the case of the water plant, between 2014 and the budget for 2017, expenses have exceeded or will exceed revenues twice.
For 2017, the budget anticipates revenues of $2,497,550 and expenses of $2,629,300.
That leaves a shortfall of $131,750.
The $131,750 must be made up somewhere.
To do that, village officials will take money out of the water fund balance, leaving $549,244 in the account at the end of 2017.
The wastewater situation is a little more bleak.
Between 2014 and the budget for 2017, the wastewater fund has run deficits over the last three of four years.
For 2017, the wastewater fund budget shows income or revenue of $1,426,060 with expenses of $2,043,550, for a deficit of $617,490.
The money to cover the deficit will come from the wastewater fund.
At the end of the 2016 fiscal year, there was almost $1.5 million in the wastewater fund.
After covering the projected 2017 deficit, the fund will have about $873,194 left.
The rate fund study had several goals.
The first was to provide enough revenue to operate and maintain the systems while also building a fund for future capital replacement and improvement needs.
Warren said those capital needs will be $2 million for the water fund between 2017-2021, and $3 million for wastewater in that same time frame.
Other goals are to have the water and wastewater funds become less dependent on money raised by the village income tax and on the larger industries in the village.
That way, if a major water customer decides to leave the village, it will have less of an impact on the remaining customers.
Warren said the village has two alternatives to reach the goals laid out.
The first is to raise rates proportionally, within the present rate structures for water and wastewater.
The second is to adopt an entirely new rate structure.
Warren recommended that for the next two years, Archbold should raise the water and wastewater rates proportionally, using the present rate structure.
The rate study recommends increasing water rates 8% in both 2017 and 2018.
The wastewater increase recommendation is 13% in both 2017 and 2018.
The increase will not create the reserves necessary, but would “turn things around,” Warren said.
The Environmental Protection Agency states the average family uses about 7,756 gallons of water per month.
Warren said that would be for a family of four or five, “who take a lot of showers.”
In Archbold, that family is currently paying a combined water and wastewater bill of $61.46 monthly.
If the first two rate increases go into effect, the monthly bill climbs to $68.06, or $6.60 more.
When the second of two increases is factored in, the cost goes to $75.41, an increase of $7.35.
After those two years, Warren suggested Archbold offi- cials could look at revamping its rate structure, based on two different factors.
The first is ConAgra. The company, historically the largest water and wastewater customer in the village, has been remodeling the Archbold facility to accommodate new production lines being installed.
Donna Dettling, village administrator, said the village, and even company officials, don’t know how the changes at the plant will impact water usage.
It will take two years before village water sales to ConAgra can be “dialed in,” she said.
Another factor highlighted by Warren is ongoing negotiations between a number of Northwest Ohio entities (ie., county officials, villages, cities, etc.) for future water supplies.
Archbold could be in line to become a supplier to one or more of those systems.
Council took no official action on the recommendations. It technically could not, because the discussion was held during a workstudy session.
Council discussed the question of whether the rate increases should be approved in one reading on an emergency basis, or if they should be done in three readings, at three separate council meetings.
Ed Leininger and other council members recommended going with three readings, but Dettling pointed out if the measure is done as three readings, additional revenue wouldn’t begin to flow into village coffers until August water bills.
Dettling said she had met with ConAgra, and was planning to meet with two other large water customers– Sauder Woodworking and Frozen Specialties, Inc.
Kevin Eicher, a councilman, said he would like to have information back from the larger water customers before making a decision.
Village officials decided Tuesday morning that the proposed water and wastewater increases would be considered in three readings.
A public notice with more information on the hikes appears on page 3 in this week’s newspaper.