SIKESTON -- The Sikeston Board of Municipal Utilities is proposing an increase in water and sewer rates.
Ed Throop, BMU's executive director, presented Sikeston City Council members with information about the proposed rate increases during their regular meeting Monday.
Throop said he regrets asking for any rate increase even as low as 1 percent or $1 but a rate increase is needed due to the age of the systems, the increase in production costs and sewer backups which have cost BMU around $100,000 in claims recently.
According to BMU's financial analysis of the last eight years, revenue has risen only 10 percent while various costs have risen from 20 to 95 percent, according to Throop. "It's a struggle to meet our customers' needs," he said.
Throop said BMU's goal is to provide the "best, most reliable service for the least amount of cost."
He said the average residential water usage is about 6,000 gallons per month. Users at this level can expect to see their bill go up $7.49 per month or just about $90 per year, according to BMU's figures.
"This will also affect our industrial customers," Throop said of the rate increases.
Throop said he doesn't like to make comparisons with other water and sewer providers, but said "our rates will still be very competitive."
The rate increases would raise about $640,000 in additional water revenue and $430,000 in sewer revenue, according to BMU's figures.
"Hopefully it will take care of us for the next few years," Throop said.
Additional revenue from the rate increase would not, however, cover the cost of capital improvements to service mains, debt service for a new water treatment plant, or the $6.5 million it would cost to retrofit the sewer plant on South Ingram.
BMU's last rate increase for water and sewer service was in 1998.
Second readings and action on the rate increase bills are expected to take place during the next regular City Council meeting March 5.
If approved by the Council, the higher rates will be seen for the first time on the bills which come out on or about May 1.
In other business Monday, council members authorized the city's Department of Economic Development to proceed with an Industrial Infrastructure Community Development Block Grant application.
Ed Dust, Sikeston DED director, said the grant funding is being sought to extend Rose Parkway at the Sikeston Business, Education and Technology Park to enhance access for the ethanol plant to be built there.
DED is seeking about $550,000 in CDBG funding toward the $1 million project, according to Dust.
"It will be a very good addition to our industrial park," he said.