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Water Authority's Rate Increase Funds Infrastructure Improvements

Smyrna City Council is considering passing a rate increase from the Cobb-Marietta Water Authority on to its customers in Smyrna.

. The Cobb-Marietta Water Authority increased its wholesale water costs by eight percent in January and the city has been absorbing the expense ever since.

Glenn Page, general manager of CMWA, said the increase is funding infrastructure improvements.

“What we’re doing with that money is we’re rebuilding our water treatment plant,” he said. “We’re not adding any new capacity. We’re implementing new treatment technology that’s required to meet new federal regulations. That one facility is costing about $30 million. We have a major project going on at one of our plants—almost a $100 million project.”

Page described water authorities as “capital intensive businesses,” which means CMWA spends more on infrastructure each year than on operating costs.

“For instance this year our revenue is about $70 million,” he said. “We’ll spend about $30 million to actually treat the water, but we’re spending another $60 to $70 million on infrastructure. That sounds unbalanced, but when you look at the capital spending we are spending more than we’re taking in, but we’re spending down our reserves that we have set aside specifically for these projects. In a typical year we’re spending more on infrastructure than we are on operations.”

Although CMWA spends most of its money on infrastructure, it has seen increases to its operating costs as well. Page said that three major components of the operating costs are personnel, power and the cost of chemicals to treat the water. CMWA staff have not received a raise in four years he said, but significant increases to power rates and fluctuation in the cost of chemicals has also increased operating expenses.

This led the water authority to implement an annual eight percent increase to the wholesale water rates. This increase will take effect in January of each year until 2018, though its necessity will be reviewed annually.

At its meeting Monday, Smyrna City Council will vote whether to pass this increase on to the city’s customers. Council Representatives will also vote whether to pass an ordinance that make future Smyrna increases effective the same time the CMWA increases take effect.   

Last week Charles “Corkey” Welch, Ward 4 City Council Representative, said it’s important that Council make the city’s increase match the water authority’s increase.

“When January rolls around we shouldn’t absorb it,” he said. “It’s not in our best interest to do that. It’s in our best interest to pass it along immediately to the citizens of Smyrna.”

 

 

Amy June 04, 2012 at 07:30 PM
I would personally rather have my property taxes raised than my water bill raised. At least the property taxes are deductible on income tax. Since I have to pay it either way, I'd rather it be deductible...
smurf June 05, 2012 at 01:24 PM
Does Patch just do PR for Smyrna and Cobb County...?....This is an outrageous increase.....and, for the record when the City of Smyrna passes along its WHOLESALE increase to its RETAIL customers it makes a handsome profit....Let me give you an example...let's say the city pays one dollar wholesale for X amount of water and sells it for two dollars retail...when the wholesale rate goes up 8% the city will pay $1.08 and when it passes this 8% rate increase along to its retail customers (citizens) that it is charging $2 THAT AMOUNTS TO A RETAIL CHARGE OF $2.16...so the city pays 8 cents more but charges 16 cents...the fact of the matter is the city loves these rate increases as it actually increases their revenue...and lets not forget, Mayor Bacon is a member of the water authority that voted for the 8% rate increase in the first place....I think the old expression, "highway robbery" would be an appropriate response for Smyrna citizens.
Neal Dow June 05, 2012 at 01:29 PM
Two words - Max Bacon.
Lissa K. June 05, 2012 at 04:26 PM
smurf how do you think the mayor keeps the city in the black. Every other municipality is hurting financially but not Smyrna. He moves money around and plunders the water authority.
Tim T. June 05, 2012 at 06:00 PM
Obviously the cost of water has increased. There's nothing we can do about that. The question is whether the city is still making a profit, breaking even, or is now losing money because of it. I would appreciate it if Sydney Busby could report the new wholesale price of water being charged by CMYA and also the current price being charged to city residents by the City of Smyrna. If we're still in the black, then a raise in rates shouldn't even be considered.
Sydney Busby (Editor) June 05, 2012 at 06:37 PM
Hi Tim, as of Jan. 1, 2012 the Cobb-Marietta Water Authority charges Smyrna $2.34 per 1,000 gallons of water. Here's a link to a story with a chart showing Smyrna's water rate increase from FY 12 to FY 13. http://patch.com/A-tNRL

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