April 14, 2015

Proposed budget trims water rate hike

A first look at Columbia’s proposed budget for the next year reveals a water and sewage rate hike averaging 9.5 percent for in-city residents, a step back from the earlier suggested 12 percent increase.

The proposed rate increase was presented to City Council as part of city staff’s draft $133.7 million water and sewer budget.

For city residents receiving both water and sewer service from the city, the suggested rate hike amounts to an average of $4.65 added to their monthly bill. For residential customers outside the city, the average monthly increase would be $7.92.

The rate hike appears necessary as the city finds itself responsible for making some $700 million worth of EPA-mandated major capital improvements to both the water and sewage systems over the next decade.

Council members had cringed at a suggested double-digit rate increase when consultants first made a presentation to them last month.

The proposal came to them Tuesday along with a plan to reduce by $2 million the annual transfer from the water and sewer fund to the city's general fund. The transfer – $4 million annually in recent years – has been a point of some concern, as the money can be spent on various projects not related to the water and sewer systems once it is in the general fund.

At the request of Mayor Steve Benjamin, Council has directed staff to bring back a budget proposal that would eliminate altogether the general fund transfer from the water and sewer fund. The vote was 5-2, with councilwoman Leona Plaugh and councilman Cameron Runyan voting “no.”

Instead, the mayor’s request asks for a transfer of 2 percent of the water and sewer fund – about $2.6 million of budgeted revenues – to go specifically toward public safety needs.

To help offset the loss of the transfer to the general fund, city staff has proposed a 2 percent increase in the SCANA franchise fee, a tax on the utility company that is ultimately passed on to its customers. The idea behind the increase is that it would put more responsibility to balance the general fund on the city’s large amount of tax-exempt properties.

Benjamin supported the franchise fee hike from 3 percent to 5 percent, along with an additional request that staff reduce city property taxes by two mills, or roughly $8 a year for a $100,000 home.

Some council members, though, balked at the idea.

“I’ve just got a real problem with the franchise fee,” Runyan said. “It's just a tax by another name, is what it is ... and it’s a tax that's guaranteed to go up. ... The net of this is that this is going to be a net negative to businesses, it's going to be a net negative to the poor, and it's going to be a net negative to people on a fixed income.”

Other highlights from the first draft of the city’s proposed budget for fiscal year 2015/16:

  • A $130.9 million general fund, up $3.4 million or 2.7 percent from last year.

  • An extra $2.8 million for public safety departments, accounting for 81 percent of the overall general fund budget increase. The budget includes $275,000 for police body camera equipment.

  • No property tax increase.

Council budget discussions will continue next Tuesday. The budget public hearing will be May 19. Final budget adoption is expected June 16.

Read more at The State here.