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Water rates in Fayette expected to increase

Justin Addison Editor/Publisher
Posted 10/13/20

The City of Fayette will likely raise water rates. The city is using less water than what it contracted to purchase from the Howard County Regional Water District in 2011. The City Council expects to …

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Water rates in Fayette expected to increase

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The City of Fayette will likely raise water rates. The city is using less water than what it contracted to purchase from the Howard County Regional Water District in 2011. The City Council expects to raise rates by $1 per 1,000 gallons of consumption and the base cost for customers outside the city limits by $5 from $27.50 to $32.50.

The rate hikes are estimated to increase revenues by around $60,000. So far the city owes approximately $100,000 to the district for shortfalls in minimum water purchases. Although it is unlikely that the city will have to make good on that debt, it will need to raise rates to water customers in order to maintain its 35-year contract with the water district. The city has never met its minimum usage requirement, and the district has only charged the city for the amount of water it has actually used. 

The water district has increased its rates to the city twice so far in 2020, once in January, and again in July.

“The approach we’re taking, I believe, will work,” said Joe McLiney of McLiney and Company, a family-owned bond underwriter based in Kansas that serves various municipalities and school districts. 

The minimum usage amount stipulated in the contract between the city and the water district was based on an estimate of expected water consumption by the Fayette and its water customers. The City of New Franklin is in the exact same situation, only with a smaller shortfall of around $40,000.

In the future, the agreements between the cities of Fayette and New Franklin and the water district will likely be re-written based on actual water usage from 2019. However, that poses another problem for Fayette. Because of the COVID-19 pandemic, Central Methodist University closed its campus in March, which means its water consumption for 2020 will be considerably less than that of 2019. 

Central Methodist is by far the city’s largest water customer. It purchases around 22% of the water sold by the city. “When the college shuts down, it really affects the water situation,” City Administrator Tyler Griffith explained.

CMU also plans to close the campus to in-person classes following the Thanksgiving break.

Mr. Griffith, who represents the city on the water district’s commission, told the Fayette City Council during its Oct. 6 regular meeting that the city agreed to purchase 115 million gallons of water per year, but only uses about 63 million gallons a year. “I’m not sure how they came up with (the estimate), but we did have higher usage in prior years,” he said. “We’re essentially consuming half of what we agreed to.”

The city showed higher water consumption in prior years, much of which was attributed to water leaks. Director of Public Works Danny Dougherty said the city has considerably reduced its water losses through its new meter program and leak repairs.

Aldermen tabled the discussion and will consider further action at its next meeting on Oct. 20. Before the city can raise rates, it must first hold a public hearing on the matter and pass a new ordinance outlining the new fees.

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