COLUMBIANA - City residents will likely see an increase on their water bills over the next two years, a result of the city's payback on a 40-year loan for the new water treatment plant.
Acting City Manager and Finance Director Mike Harold told council this week the United States Department of Agriculture (USDA) has proposed rate increases through 2015.
Should the city go with the proposed rates customers would be paying $11.30 per 1,000 gallons each month in 2015. Customers are currently paying $6.54.
Harold explained the USDA calculated the rate increases to ensure the city will be able to pay back the 40-year, zero-interest loan for the multimillion-dollar project.
The USDA loan would pay for a majority of the nearly $15 million plant slated for construction next year.
After looking over the proposed rates councilmen Bob Bieshelt and Bryan Blakeman were concerned the increases would be too costly for customers.
Blakeman said customers would be experiencing an 80 percent increase in water rates over two years.
"People would be in a mad exodus out of this city," he said.
Bieshelt suggested Harold take a look at the total water bill, in gallons, and stretch the rates out "as far as they stretch" to pay back the loan.
"Let's do it ourselves and know what we know rather than what the bureaucrats are telling us," he said.
Bieshelt has said over the course of the project that residents should not have to pay for the new plant and he is not pleased rates have been increased for customers three times over the years.
In September of last year, when former City Manager Keith Chamberlin anticipated the rate increase, Bieshelt said a surplus should have been built up in the water fund over time to offset the project's cost.
The fund does not have a surplus and is currently at about $500,000, Harold said.
Chamberlin advised council at that time a rate increase was "likely" but declined to offer an estimate on how much of an increase should be expected.
The new plant is needed because the existing plant on the southeast end of the city is outdated and does not feature a back-up system.
Harold told Bieshelt different rates could be calculated by the city since the USDA rates are only a proposal.
Councilman James King asked how the USDA rates were calculated, and Harold said he wasn't sure.
King then suggested Arcadis Engineering employees attend the next council meeting to answer their questions.
The company was hired for the project by the on a $690,000 contract in 2008.
Council then approved a second reading of an ordinance designating the services the city will provide to the 86.7 acres being annexed in from Fairfield Township for the new plant.