FAIRHOPE – Sewer rates will be going up for customers of Fairhope Utilities starting in October as part of a three-year plan to bring revenue into balance with expenses.
The Fairhope City Council voted Monday, July 27, to approve the rate adjustments.
Michael Allison, operations manager for Fairhope Utilities, said fees paid by customers now pay about 72 percent of department expenses.
“For every dollar that was needed, we took in 72 cents,” he said. “So that other money had to come from other utilities department to cover the day-to-day operation of the wastewater department.”
Costs will go up each year on Oct. 1 the start of the new fiscal year. The ordinance also allows the city to add labor costs adjustments if necessary.
Starting Oct. 1, 2020, the rate for customers inside Fairhope will be a basic charge of $16.05 a month. That charge includes the first 1,000 gallons of use. Each 1,000 gallons after that will be charged $4.75.
Customers outside Fairhope will pay a basic rate of $18.42, which includes the first 1,000 gallons. Additional use will cost $5.22 for each 1,000 gallons.
After Oct. 1, 2021, customers inside the city limits will pay a minimum charge of $18.50. That charge will not include any minimum for water. All usage will be billed $4.75 for each 1,000 gallons used.
Outside Fairhope, the charge will be $20.50, which will also not include any amount of water. All usage will be charged $5.75 for each 1,000 gallons.
On Oct. 1, 2022, the basic rate inside Fairhope will go up to $20.00 a month. Usage will be charged at the rate of $5 for each 1,000 gallons.
Outside Fairhope, the monthly charge will be $22.50 a month with a usage charge of $6 for each 1,000 gallons.
The current basic rate $16.04 for services inside Fairhope. That rate includes the first 2,000 gallons of water used by the customer. The charge for additional use is $4.24 for each 1,000 gallons used.
For Fairhope Utilities customers living outside the city, the basic charge is $18.42 and $5.22 for each additional 1,000 gallons.
The average use inside the city limits is about 5,000 gallons. Outside the city, the use is about 7,000, Allison said.
The average cost for sewer services in Fairhope is now $28.77 inside the city and $44.52 outside the corporate limits, Allison said at an earlier meeting.
Using averages of 5,000 a month inside the city, customers would pay $35.05 after Oct. 1, 2020. After Oct. 1, 2021, that cost would be $42.25 a month. The cost would be $45 after Oct. 1, 2022.
Outside Fairhope using the average of 7,000 gallons a month, the cost would be $49.74 after Oct. 1, 2020. In 2021, that would go up to $60.75 and increase to $64.50 after Oct. 1, 2022.
“This rate adjustment is to rectify a situation where we are 28 percent underfunded in our wastewater department,” Allison said. “Basically, this is going to cover a lot of the operations, maintenance expenses with a little bit of money left for capital jobs that are not funded by the federal government.”
The city will also adjust water rates.
Inside Fairhope, the cost will be $12.03 a month after Oct. 1, 2020. That cost will include the first 1,000 gallons of water used. Each additional 1,000 gallons of water will cost $2.74.
After Oct. 1, 2021, the basic charge will not increase, but the fee will not include the first 1,000 gallons. The cost of water usage, however, will drop to $2.39 for each 1,000 gallons
Outside Fairhope, the basic water rate will be $15.48 after Oct. 1, 2020, which includes 1,000 gallons. Each additional 1,000 gallons will cost $3.92.
After Oct. 1, 2021, the basic cost will stay $15.48, but will not include the first 1,000 gallons. The cost for each 1,000 gallons will be $3.57.