City looks at financial status
By Michael Butler
Tallassee City Councilman and Finance Committee Chairman Bill Godwin recently spoke on WTLS Radio regarding the upcoming fiscal year. The projected budget is $8,692,585.
"That's a little increase over our amended budget for 2016," said Godwin. "We're looking at a differenc of a little over $300,000. That's basically level funding."
Godwin said that sales tax revenues have increased, but utility revenues have decreased.
"Look at 2011, the consumption of water generated revenue of $1,415,150. In 2015, the consumption dropped and the revenue dropped to a little over $1.3 million."
Russ Robinson of Alabama Municipal Environmental Engineers spoke about Tallassee's water customer base.
"There are 2,500 residential and commercial customers. There are three industrial water users; GKN, Neptune and the Tallassee Housing Authority. Those three industrial customers use more than all your commercial customers combined," Robinson said. "There are 1,829 sewer customers. There are three wholesale; Wall Street, Friendship and Eclectic."
The city has not had a rate increase on utitlities since 2009.
"We felt it was imperative to adjust water and sewer rates, while leaving the gas rates alone, to help insure the city's ability of covering the costs of providing services," Godwin added. "In addition to aligning utility rates closer to costs, the city is in a favorable position based on current market interest rates to receive a pretty substantial refund. We're projecting about $1.1 million in present value savings without extending the maturity of debt by refinancing a portion of the 2011 bond series."
Godwin stated that some of the city's current bond indebtedness is at a rate of 5 percent.
"We can get it less than 3 percent," he said. "We're hoping we can get this finalized to get this refund before rates start creeping up. If we can get this money back, it will be a real win for the city. We'll be able to hopefully do some debt reduction."
The increase for residential customers is 5 percent on water and 10 percent on sewage.
"A monthly combined water and sewer bill based on a typical use of about 5,000 gallons would increase your bill by about $3.70 per month," Godwin noted. "We're projecting revenue of about $137,000 annually. Even with the increase, Tallassee's water and sewer rates are still substantially lower than the median rates throughout the state."
With the new rates in Tallassee, the cost for 5,000 gallons would be $47.55. The state average is $58.06.
"We've got a lot of big projects that we need to do," Godwin said. "We've got to have some revenue structure."