ASHLAND — The price of water for Ashland residents and businesses could increase in July by 12%, along with a new monthly surcharge, officials said earlier this week.
The move will help the water and wastewater departments stay out of the red and to finance future projects meant to modernize its infrastructure, officials have said.
The city began working along those lines in early 2021, when officials took advantage of lower interest rates on debts in its water and sewer departments. Finance Director Larry Paxton said those rates are 4% now and will ultimately lead to savings of around $250,000, as well as cut the length of terms.
Ashland Mayor Matt Miller has been warning that a water rate hike is imminent since December.
By July, those higher water rates will likely go into effect, he said.
Rates will increase by another 12% each year until 2025, when rates are only expected to increase by 2% through 2031, according to a city document outlining the changes.
Monthly rates will look differently for each consumer, depending on the consumer’s monthly usage by cubic feet and the size of the water line.
Altogether, the rate hikes are expected to rake in between $300,000 and $500,000 annually.
The city also plans on creating a new surcharge. The revenue from those fees will be earmarked for capital improvements, Paxton said.
Those monthly rates will be $3 for residential consumers, $7 for businesses and $15 for larger commercial operations. Those rates are expected to stay unchanged through 2031.
Paxton said he does not yet know how much revenue the new surcharge will bring to the city.
“There are many considerations when you look at rate increases. It’s not a popular decision by any means and nobody really likes to do it, but at the same time, keep in mind folks: It’s a multi-million dollar operation that must be maintained if we’re going to deliver a quality product,” Paxton said.
Councilman Jason Chio voiced concern about getting information out to larger commercial entities who need to plan budgets accordingly.
“I mean, they are paying the lion share of that water bill. So it’s going to be tough for everyone, but those are also the people that keep this town vital,” Chio said.
Miller and Paxton said the larger water users are slated to receive notifications in the mail sometime in June.
The city has not touched its water rates since 2009, Miller said.
The talk of rate increases comes when the federal Environmental Protection Agency is due to review a study that looks at options to fix a problem with the water treatment plant’s equalization basin, which overflows during intense rainfalls.
City council hired Burgess & Nigle in September for just over $200,000 to look at the problem and produce a report the EPA will review in June. Fixes there could cost up to $30 million, according to Mike Hunter, the city’s utilities director.
