WATER VOTE COMES TUESDAY

While at least one member of the Cape Girardeau City Council says a proposed 5 percent water rate increase isn't needed, another says it may be unavoidable.

Councilman Richard Eggiman said that while some measure of increase is needed to match rising costs, based on information provided by city staff last week, 5 percent is too much.

"I won't support a 5 percent increase," he said.

However, Councilman Tom Neumeyer said the numbers justify the increase. The only other choice, he said, is reduce the level of service.

"Based on the information the staff has given us, I don't see what we can do to avoid a rate increase," Neumeyer said.

The City Council will consider matter at its Tuesday meeting, which begins at 7:30 p.m. at City Hall.

The water rate ordinance was scheduled for preliminary passage Jan. 6 with final passage to come Tuesday.

However, the council voted to table the matter after some members complained that they had not been provided with sufficient information to make a decision.

Under the proposal, monthly water bills for residential customers would increase an average 74 cents a month while commercial customers would pay an average $3.13 more monthly.

If the council agrees, the ordinance will be granted emergency passage so it can take effect Feb. 1 as originally scheduled.

The increase is needed, supporters say, to cover operating costs expected to climb by more than $4 million this year.

Eggiman said he believes only a 3 percent increase is needed. Under the city charter, 5 percent is the maximum the council can raise individual fees each year.

"Just because we finally got a cap on expenses and people voted on it does not mean we go to 5 percent every time," Eggiman said.

The council increased water rates by 3 percent last year.

Neumeyer said the difference between 3 and 5 percent per customer is negligible and that the city rates are still well below the national average.

"No one wants to see rates increase, but the bottom line is we have to match rates to expenses or cut back on services, " Neumeyer said. "When you turn on the tap, you expect to get good, clean water and that is what we need to continue to provide."

The full 5 percent increase would be expected to generate $190,000 in new revenue annually.

The increase has already been factored into the budget for the current fiscal year, which runs through June, and would provide $80,000 for the current fiscal budget.

Councilman Melvin Gateley is concerned with the timing of the increase.

City voters approved a $26.5 million bond issue and quarter-cent sales tax for water system capital improvements in November and the Cape Girardeau School District is seeking passage of a bond issue for new building construction in March.

"I just wish it would have come at a different time of the year since the public schools are getting ready to ask for a bond issue," Gateley said. "Citizens can only add so many dollars to their budget, especially so many of our people with low or fixed incomes."

Gateley said he doesn't feel locked into voting for the increase, but said the city should avoid allocating money for the budget that has not yet been approved.

"We need to be more accountable when we lay out the budget to see that everything is in order so we don't get into these predicaments," Gateley said.

The city purchased the water system in 1992 from Union Electric. Alliance Water Resources Inc., formerly Mid-Missouri Engineers Inc., has operated the system for the city first acquired it.

Alliance handles every aspect of operations except for billing and collections, which is handled by city staff.

Tom Taggart, who manages the water system for Alliance, said the company's duties include running the two water plants, replacing failing mains, installation of new service and meter reading.

The city will pay Alliance $2.12 million for its services this fiscal year -- an increase of more than $263,000. That increase breaks down to $81,000 for chemicals, $78,000 for personnel and $70,000 for repairs.

The company's initial contract with the city was slated to expire in June before the council last month granted an extension through 2002.

City Manager Michael Miller said the city was under no obligation to seek bids from other companies on the contract. He said the city is satisfied with the service Alliance has provided.

Of the money budgeted to the company, 10 percent is profit for Alliance. Miller doesn't believe the city would save money running the system itself.

"I don't feel we could provide as good service at the level they provide now," Miller said.

Neumeyer said the water system was a "white elephant" when the city acquired it.