VINELAND — The city will likely vote next week to authorize a 10 percent increase in local water utility rates beginning April 1.
Local officials said the increase is needed to prevent the city’s water utility from reaching a zero fund balance in one or two years, which essentially means the agency will operate in the red.
This is the third time in three years the city will authorize rate increases to help the water utility’s ailing finances. Water utility customers saw rate increases on March 1, 2011, and Jan. 2, 2012.
Under the current plan, residential customers using an average of 8,419 gallons of water a month will pay $22.22. That is an increase of $2.02 a month, local officials said.
City Municipal Utilities Director Joseph Isabella told City Council on Tuesday that water utility revenues for fiscal year 2012 were $232,000 less than projected. Expenses for that period were also $190,000 more than actual water utility revenues of $6.6 million, he said.
The city’s water utility has also made significant upgrades in water quality over the past few years, he said. Water tanks are also being flushed and cleaned more frequently, he said.
“This costs money,” Isabella said.
In February 2011, city officials said the water utility faced a fund balance of less than $100,000 when the fiscal year ended. The fund balance would have been so small that the water utility would essentially be running in the red, city officials said.
City officials said in 2011 that the water utility finances were artificially bolstered for the past few years by the inclusion of money gained through an environmental settlement. The water utility hadn’t raised enough in fees to cover operating expenses since 2007, they said.
The monthly residential water bill for a base amount of 8,400 gallons of water wound up increasing from $16.71 to $18.31 in March 2011. The bills increased to $20.20 cents on Jan. 1, 2012.
The city’s water utility serves about 14,000 customers.
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