Rates to increase for Shelby Water Services customers
Beginning in April, customers of Shelby County Water Services will see a rate increase on their monthly bills.
On Feb. 10, the Shelby County Commission passed a resolution that sets in motion annual increases over the next five years. The increases begin in 2014 and continue until 2018.
More than 10,500 accounts are currently connected to Shelby Water Services, according to shelbycountyalabama.com. The retail rate increases will primarily affect residents of the 280 corridor, as most customers are located in Westover, Chelsea, Eagle Point, Greystone, Forrest Park, Forrest Lakes, Mt. Laurel, Regent Park, Villas Belvedere and Highland Village.
According to the resolution passed Feb. 10, these customers are currently paying a monthly $20.48 Retail Minimum Charge for 3,000 gallons and $4.10 for every 1,000 gallons used beyond that minimum.
In April, the minimum will be reduced to 2,000 gallons at a charge of $20.68, and customers will pay $4.14 for every 1,000 additional gallons used.
Additional annual increases are as follows:
• 2015 – $20.89 for minimum 1,500 gallons, $4.18 for every 1,000 additional gallons
• 2016 – $21.10 for minimum 1,000 gallons, $4.22 for every 1,000 additional gallons
• 2017 – $21.31 for minimum 500 gallons, $4.27 for every 1,000 additional gallons
• 2018 – $21.52 base charge, $4.31 for every 1,000 gallons
That means a current customer using 4,000 gallons per month pays approximately $24.58. In April, that price will be closer to $28.96. By 2018, it would be approximately $38.76.
Ed Carter, financial services manager for Shelby Water, said the increase was structured with help from Jackson Thornton Utilities to be applied fairly to all customers of the service. Rate increases will also be applied to tap fees and wholesale customers of the system, which include Alabaster, Pelham and Sterrett-Vandiver.
Carter said the increase is a proactive measure as the system looks to extend a current loan. Beginning in 2004, Shelby Water Services received three loans from the Drinking Water State Revolving Fund (DWSRF), none at a higher rate than 3.5 percent annually.
“We used those funds to built a water plant, distribution lines, pumps, tanks and systems to serve our retail and wholesale customers,” Carter said. “These were huge projects.”
DWSRF loans are part of a program through the Environmental Protection Agency that provides resources for systems seeking to improve water quality infrastructure. These loans have a maximum 20-year lifespan.
Shelby County, Carter said, wants to extend those loans by 40 years by using the private sector. The system’s five-year schedule of rate increases would provide a means to afford the new payments, which could increase, while continuing to support the reserve fund.
“We want to take our existing balance and go out to the market on 40-year rates,” Carter said. “We’ll test the waters with 30, but we believe 40 years is going to fit our schedule and allow us to better meet the needs of our capital.”