BAY ST. LOUIS -- A proposed utility-rate increase voted down at Thursday night's City Council meeting as four council members voted against adding a fixed debt-service line item to utility bills.
The motion, made by Ward 4 Councilman Bobby Compretta, came after hours of discussing two options that would allow the city to make its debt-service payment of $365,000 on July 1, 2015, and still meet operating costs. Talk of an increase came after the city decided to refinance a $1.7 million utility bond because it could not make an upcoming payment.
The first option was to build the debt into the rates by adding $4 to both water and wastewater, and adding $1 to garbage.
The second option was to add a $9 fixed debt-service line and after the bond was paid off in five years, the item would be taken off.
"As a city, we don't have a lot of practice in raising rates," said City Clerk David Kolf. "We haven't done this in a while."
Council President Wendy McDonald, who represents Ward 2, asked if the increase allows the city to build any reserve.
Kolf said the object is to break even and keep the system maintained. "If we see cash pile up, our rate is too high."
The $9 increase would cover the debt service. Anticipating the line item money goes directly to the bond account, Kolf said, "Hancock Bank wants to know our rates are generating enough to make our debt-service payment."
Kolf said they would leave the base rate the same, adding debt service, but shifting for high-volume users. Add-on costs per 1,000 gallons would increase to $6, generating a capital and maintenance reserve.
Ward 5 Councilman Joey Boudin said he was not ready to vote on anything Thursday. "Let's leave it alone, give us a little bit of time to review everything and wait until the next meeting. If we vote tonight, I'm voting no."
Ward 6 Councilman Lonnie Falgout agreed, "I don't see the rush to do this tonight. If we vote tonight, I'll say no."
Boudin, Falgout, Councilman-at-large Mike Favre and Ward 1 Councilman Doug Seal voted against the motion.
"We were just given the information and numbers at the beginning of the meeting, we can't make a decision," Boudin said.
Realtor Avra O'Dwyer said she was disappointed in the council for even considering raising utility rates. O'Dwyer presented McDonald with a bag of coffee and a packet of lemonade and said, "Wendy, you have to make some decisions. You're either gonna have to wake up and smell the coffee or keep drinking the lemonade."
Because the utility hike was not implemented as proposed, the bond payment for July 1, 2015 will not be met. A higher increase is now needed to make up the month lost that was included in the proposal.
The issue will be discussed again at the next council meeting July 8.