KINGSPORT - City residents will not see an increase in their water bill this summer, but their sewer bill will be going up by about 90 cents.
And if you live outside Kingsport and receive water and sewer service from the city, you can expect to see both rates going up later this summer.
City leaders heard the details on these proposed water and sewer rates during a three-hour budget work session Thursday evening. The Board of Mayor and Aldermen has held three such work sessions this month going over the fiscal year 2008 budget.
A balanced budget has to be approved by June 30 for the new fiscal year, beginning July 1.
According to the proposed budget, the water rate increase for outside city residents is 4 percent. City Manager John Campbell said the increase would generate $245,200 in revenue for the city.
Budget Director Judy Smith said the increase would amount to $2 for a residence using 5,000 gallons of water a month.
Campbell said the rate increase is a reasonable price for the return on investment made in supplying water lines to customers who reside outside the city.
"The farther away from the plant, the harder it is to get the water to them," Campbell said.
Water revenues are up 4 percent over last year, $12.8 million to $13 million, while the debt service has dropped by around $100,000. Campbell said a joint study on Kingsport providing water to Scott County, Va., is in the works and would be complete within the next two months.
"(Providing water) makes good sense if we have the ability to do it. Almost nobody processes water as inexpensively as we do," Campbell said.
As for sewer rates, customers living inside the city can expect to see a 3 percent increase in rates, while people living outside the city will see an 8 percent increase. This amounts to a 90 cent and $3 increase, respectively, Smith said. For the 2009 fiscal year, Smith said the city is anticipating a 3 percent increase in sewer rates for city residents and 7 percent increase for out-of-city customers.
"We do have higher sewer rates in the context of sewer only. Most people pay water and sewer together, and our combined rate comes in about the middle of the pack," Campbell said, alluding to the fact these rates would continue to increase in the foreseeable future.
"If we keep on (the rate stabilization) schedule we're on, we hope to improve those rates every year. The long term you get in a situation with very minimal rate increases," Campbell said.
Alderman Ken Marsh suggested city staff place the water and sewer rates of Mount Carmel and Church Hill on future comparison charts.
"We could be doing a lot of things with Mount Carmel that would save them money and help us at the same time," Marsh said.
Kingsport's health insurance costs will increase 5 percent ($5.64 for a single and $14.06 for a family). The increase to employees for co-pays will go from a 90/10 share to an 80/20 share. Kingsport had $5.1 million in insurance claims last year.
The proposed budget includes a 2 percent pay plan adjustment with an average 2 percent step increase amounting to $683,100. The career ladder is estimated to cost $59,000, and a midyear performance bonus for employees totals $150,000.
City staff wrapped up the overall summary of the budget Thursday evening with plans to craft a formal budget for BMA review in June.