Council members continued to slog through the 329-page proposed 2012 budget during a work session Wednesday night.
Members listened to lengthy presentations related to water, wastewater and electric utility budgets. City staff received a brief round of applause when interim-city administrator Melissa Mundt announced the proposed budget includes a reduced wastewater rate hike.
“It’s 2 percent less of a rate increase than we were thinking we needed to do,” Mundt explained.
City residents will see a 6 percent increase rather than an 8 percent wastewater rate hike if council members approve the proposed 2012 budget. They’ll also see a 3 percent water rate hike to prevent that utility’s fund from dipping below desired levels.
Throughout the evening, council members offered suggestions to assist water and wastewater funds. There are needs in both, staff explained.
For example, Jim Melvin, water/wastewater manager, said water meters are aging faster than the city can afford to replace them. The city loses water revenues as the meters age. Due to normal wear and tear, old meters measure about 5 percent less than optimal. That’s costing the city approximately $600,000 in lost revenues each year, Melvin told council members.
Council members spent a significant amount of time considering whether to charge a fee for online bill pay.
Credit card companies charge all three utilities — water, wastewater and electric — approximately $77,500 in fees each year, and at one time, the city attempted to collect that fee from residents who utilized online bill pay.
“(The fee) was rescinded unanimously because of public outcry,” Gourley said.
Currently, approximately 20 percent of all utility bills are paid online. In 2010, the credit card transactions amounted to more than $3 million.
Gourley said the approximate 1,342 online transactions each month are customers that don’t require staff time. That, she explained, is one reason, she recommended that the city keep its current policy of not charging extra for online bill pay.
“That 20 percent of traffic might come in here, and then we’d be handling them,” she told the council.
She said the credit card company would also get a cut of any convenience fee the city instituted. Also, the city receives a favorable rate from the company because the city doesn’t charge a fee for the service.
Currently, the city pays $1.33 for a $100 credit card transaction. The fee jumps to $2.22 if the city charges a convenience fee.
Gourley made her recommendation to the council based on the whether the existing charges from the card companies to the city are reasonable costs of doing business.
In her mind, the answer is yes, she told council members.
The $77,500 the city will spend in credit card fees is divvied up between the three utilities — electric, wastewater and water. In 2012, the fee for the electric utility would comprise .20 percent of its budget; for the water fund, credit card fees would comprise .46 percent of its budget; and for the sewer fund, credit card charges would cost .89 percent of its budget.
“It is peanuts,” Gourley told the council. “It sounds like a lot of money, but in my opinion, it is a very affordable cost of doing business.”
The council will host another work session to discuss the proposed 2012 budget at 6:30 p.m. on July 11 at city hall. The proposed budget can also be viewed online at www.gardnerkansas.gov.
Proposed Gardner budget includes 3 percent water, 6 percent wastewater rate increases