COUNCIL TABLES WATER RATE HIKE; TWO SAY THEY WANT JUSTIFICATION

The Cape Girardeau City Council Monday agreed to table for two weeks an ordinance that would increase city water rates by 5 percent.

During a study session prior to the council's meeting at City Hall, some council members expressed concern that they had not been provided with hard statistics indicating that increases in operating costs justified the rate hike.

"I can't really vote yes on this point until I get some facts and figures," said Councilman Melvin Gately.

The ordinance will be discussed at the council's Jan. 21 meeting. In the meantime, city staff will provide the council with more detailed information concerning expenses and revenues for the fiscal year, which ends June 30.

Prior to being tabled, the ordinance was scheduled for a first reading Monday with final passage to come Jan. 21.

"To have an ordinance and expect us to pass a first reading with as little information as we have is not good business," said Councilman Richard Eggimann.

Since the increase was to be effective Feb. 1, the preliminary and final votes on the measure -- presuming the councilmen are satisfied with the cost analysis provided them -- will be required at the next meeting.

Councilman Jack Rickard suggested pushing final passage back a full month. However, Mayor Al Spradling III said such a delay would put water system revenues behind what is budgeted.

"That would be significant in terms of dollars to postpone it for a month," Spradling said. "If we are going to implement it, we need to implement it on schedule to keep within the budget."

Spradling did not object to tabling the matter until the next meeting.

The rate hike is already factored into the city budget for the 1996-97 fiscal year. The council approved the budget last spring.

John Richbourg, the city's finance director, said the increase is necessary to offset increases in operating costs.

The proposed increase would provide an estimated $190,000 in additional revenue annually.

The water system operating budget for the current fiscal year is $225,000 -- $80,000 of which would come from the rate increase.

"A 5 percent increase would cover our cash flow needs for this year," Richbourg said.

If the measure is passed, the average monthly residential water bill would increase 74 cents, from $14.87 to $15.61. The averge monthly commercial water bill would rise $3.13, from $62.75 to $65.88. Average yearly increases would amount to $8.88 and $37.56 respectively.

Gately and Eggimann both wanted assurances that the proposed 5 percent increase is no more than is needed to actually cover increases in expenses. Under the city charter, 5 percent is the maximum that fees may be raised each year.

"I would hope that before we make a decision we would be fairly educated," Eggimann said.

Revenue generated by water rates covers the costs of operating the system and purchase of materials, including chemicals used in water treatment, day-to-day maintenance and repair and labor.

Two city residents expressed their opposition to the rate increase during the meeting.

One of the residents said the rate hike on the heels of the $26.5 million bond issue and quarter-cent sales for capital improvements to the water system approved by voters was unfair and deceptive.

However, Spradling said the city took great pains to inform voters that passage of the ballot items would not preclude future rate increases for operational costs.