. 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.”