Dunkirk considers water rate hike

DUNKIRK — Financial consultants recommend that the city increase water rates to pay for future capital improvements.

Dunkirk City Council opted to table a decision on the rate hikes until its next meeting on Sept. 11.

The public accounting firm Umbaugh and Associates was tasked with conducting a water rate study to help city officials make a decision on rate hikes that will pay for maintenance and improvements to the city’s water system.

Accountant Greg Wright said that 2018 and 2020 will be the two years that will require greater cash reserves for capital improvement projects. In 2018, the Elm Street water main project is tentatively scheduled to move forward at a cost of $115,000, and the city will have to purchase an estimated $100,000 dump truck.

In 2020, the city will tackle a $350,000 project to replace a water line under Blackford Avenue.

The city’s current water rates would not be able to fund the projects and also maintain necessary reserves in the city’s operation and maintenance fund, bond and interest account, and debt service reserve account, Wright said.

By 2018, the city would have to begin using money from its depreciation fund to keep those accounts at minimums and pay for capital improvements.

Dunkirk hasn’t raised water rates since 2010.

“What we determined was that we would need to generate, by the ending of 2021, and additional $1.1 million,” Wright said. “We are facing decreasing cash each year.”

Wright offered a pair of options for city officials.

One would implement a 50-percent increase in the water rate immediately, and provide the necessary income for the future projects. The other plan would phase in rate increases, starting with an immediate 25-percent increase, then a 20-percent increase in 2019 and a 15-percent increase in 2020. The second plan would increase rates by 72.5 percent from the current rate by 2020.

“If you were to raise rates by 50 percent immediately, you would generate an additional $230,000 a year,” Wright said. “The other option was a phase in, so if you did an immediate 25-percent increase, that would generate another $29,000 this year, and then $114,700 the next year. Then starting 2019 you would do another 20 percent, which would give you another $114,700. Then in 2020, it would go up another 15 percent, which generates an additional $103,230.

The key difference between the options, Wright said, is when the money would become available. The immediate 50-percent increase would provide the city more money up front.

“With phasing in the rates, what we lose is having that money on hand in the front end. So you have to generate more money, later.”

A third option, Wright said, would be to completely reevaluate the future capital projects, and see if any could be cut or scaled down. But he cautioned that choosing to forgo capital projects would result in rising maintenance costs for the city.

Council tabled a decision on the rate increase in order to decide on a new trash pickup contract and see what kind of impact that will have on city residents. Officials plan to revisit the issue at the Sept. 11 council meeting.

In other business, council members Tom Johnson, Jesse Bivens, Lisa Street and Jack Robbins, absent Bryan Jessup:

•Transferred a vacant lot on Franklin Street and the property at 126 E. North St. to Dunkirk Industrial Development Corporation. That will allow the corporation to rehabilitate the blighted properties.

•Council also approved a $1,070 contract with Cook’s Nursery of Portland to trim 107 trees along Main St. Cook’s had the low bid, E and T submitted a bid of $1,500 and Newsome submitted a bid totaling $2,675.

•Decided to pay for the already completed city income survey out of a joint contractual services fund because the results of the survey can be used by all city departments for grant applications.

•Heard from Mitch Hansel of Fleis & Vandenbrink that Humbard will begin work on lining lateral sewer lines today for the Barbier Street project. Council also approved a $34,182.90 to Culy Contractors for lining of the sewer’s main line.

•Approved a canning jar drive by Dunkirk Glass Days committee, which will be held 1 p.m. to 5 p.m. Sept. 9 at the stoplight in town and the four way stop at Dunkirk City Park.

•Read a letter from Dunkirk Beautification Committee thanking the community for its support of the summer concert series at Webster-Depot Park.

•Discussed confusion regarding the vacating of alleyways. City attorney Wes Schemenaur said he will prepare an information sheet to clarify the issue for residents who hope to vacate alleyways in the future.

•Approved claims totaling $123,268.90.