During Tuesday's meeting, John Skomp, a representative from Crowe Horwath LLP, an accounting firm which has been conducting a water rate study for approximately four years, presented the rate and financing report his company created.
"This is simply a presentation on our findings," Skomp said. "Before any action can be taken an ordinance would have to be drawn up, so this is more about providing pertinent information."
Skomp informed the council that the income from the water utility has remained consistent in recent years, most likely in part to not having an increase since 1993, but issues could arise in the future.
"Right now, there is enough to cover basic expenses, wages, taxes and the debt service, while still having enough to do minor projects," he said. "However, the city is not gaining capital to replace or repair pumps or water mains, which is inevitable and also needed. Without having capital for such projects, it could catch up with you."
Currently, water rates are on a six-tier system based on usage, which Crowe Horwath is recommending dropping down to five tiers.
"For customers using more than 50,000 cubic feet of water per month, which is obviously the larger customers, they are paying less than it cost for the city to produce," Skomp said. "By dropping the final tier, it would increase the rate from 62 to 87 cents per 100 cubic feet of usage."
This increase does not account for the recommended jump proposed in order to help fund a potential bond for capital improvements.
"The suggested 87 percent increase would help the city achieve the five-year capital improvement plan we also proposed which includes a bond for more than $5 million," Skomp said.
Part of the plan includes new water tanks to replace the water tower in Brazil as well as place one near Interstate 70 in order to provide better water pressure to towns purchasing water from the city.
The towns of Carbon, Harmony, Knightsville and Center Point currently purchase their water from the City of Brazil, and residents from those areas expressed concerns about the suggested increase.
Center Point Town Council President Roy Smith suggested possible alternatives to ease the transition.
"I understand there needs to be an increase, but we enacted a 42 percent increase ourselves a few years ago and our residents can't really afford a double hit," Smith said. "A phase-in would help or even add the 87 percent increase for a while before dropping the bottom tier."
Other residents were concerned the increase would also affect the sewer portion of their bill, but City Engineer Brian Pohlar ensured them this is not the case.
"The increase would affect only the water portion of the bill," Pohlar said. "The sewer rate is based on water consumption."
Skomp explained normal customers use approximately 5,000 gallons of water per month which currently carries an approximate charge of $13.25 to $15.25. With the proposed increase, the charges would go up to approximately $24.79 to $28.53.
"When you hear 87 percent, it sounds huge," he said. "But with the increase only on the water portion, it isn't too bad for regular customers."
Ultimately, the council needs more time to analyze the results of the rate study and have more in-depth discussions before making a final decision on if, or how much, to increase water rates.
Council member Sam Glover asked Skomp to provide a breakdown of how various phase-in options would affect water customers as well as the city before the council could move forward, something City Attorney Bob Pell agreed with.
"It will take some time before this is finalized," Pell said. "Once an ordinance is drawn up we would still need to have a meeting, a public hearing and another meeting, so there is plenty of time to figure out what is best for everyone."
The next meeting of the Common Council of the City of Brazil will be Tuesday, Nov. 11, at 7 p.m., in the Council Chambers of City Hall.