MT. VERNON — The City Council is considering a water rate increase for the upcoming year.
The council met Tuesday to discuss portions of the upcoming budget, which will cover the fiscal year beginning on May 1.
Under the public utilities operating budget, with no increase, the department would have a $369,633 ending fund balance — less than the $484,546 ending fund balance for this fiscal year. However, city financial policies which were enacted last year require $585,536 at the end of the fiscal year.
City Manager Ron Neibert and City Finance Director Merle Hollmann presented two additional options if the council wants to get closer to the financial policy requirement — a 1.8 percent increase and a 3 percent increase.
Under the proposal for a 1.8 percent increase, the ending fund balance would be at $484,484 — about $101,000 from the fiscal policy requirement. Under the proposal for a 3 percent increase the ending balance would be $561,034 — $24,500 less than the financial policy.
When the financial policy was passed and the budget prepared for the current fiscal year, the council agreed not to increase water rates high enough to cover the financial policy in the first year, instead working to bring up the ending fund balances over two years.
Mayor Mary Jane Chesley reminded the council that an increase in trash services for residents was just enacted. In addition, Neibert said this winter a large undetected water leak caused a $100,000 loss.
“We started getting high water bills from Rend Lake Conservancy District and we suspected a hidden leak,” Neibert said. “It was found last weekend. They found a 6-inch line south of Veterans Park that was leaking and caused us to lose a lot of revenue.”
Neibert and Hollmann explained loss in the water lines is normal and every budget includes 15 percent water loss when created. The leak found last weekend is about 7 percent above the 15 percent which was budgeted.