HIAWASSEE, Ga. – Hiawassee Mayor Liz Ordiales announced that residential water rates are proposed to more than double for city citizens over a five-year span. Rates are scheduled to increase from $19.27 per month to $24.67 this year, rise to $30.09 in 2020, climb to $34.61 in 2021, spike to $38.76 in 2022, and level at $42.25 by 2023. A monthly, thousand gallon consumption allowance will remain in place. The proposal will not effect businesses, Ordiales said.
Mayor Ordiales stated that the City of Hiawassee sought counsel from the University of North Carolina, in conjunction with GEFA, in determining the rate hike, opting to spread the increase over a half decade rather than impact residents in an immediate, full-scale fashion.
The rate increase is calculated to heighten city revenue by nearly $187,000 during the first year of implementation.
Prior to rate determination, the University of North Carolina-Chapel Hill contacted the City of Hiawassee to formulate the projected increase. FYN filed an open records request with Hiawassee City Hall, obtaining in part the following information:
“The standard way that many systems measure affordability is to look at “percent MHI”—the percent of income your median household would pay each year for typical water and sewer use,” UNC-Chapel Hill Environmental Finance Community Advisor Stephen Lapp explained. “For our analysis, we assumed ‘typical water use’ was 3,500 gallons per month for residential customers. At that level, your median household (earning $36,058 a year) would spend 2.34 (below booster) and 2.43 (above booster) percent of its annual income on water and wastewater services. There are no universally accepted standards for what constitutes ‘affordable,’ so it will be up to your system to determine if that level is acceptable.
“Looking just at median household income, though, gives you a rather incomplete picture of affordability. It is, after all, the median income—half of the households have incomes below that level.
“Thankfully, the census offers us a broader perspective on household income through their American Community Survey. Here, we are able to see the percentage of your customers at different income “buckets” (up to $10,000, $10,000 to $15,000, etc.).
“In Hiawassee, about 33.6 percent of households earn less than $25,000 and are in the lowest income buckets. Those who are in those lower buckets can spend up to 8.45 percent of their annual income on water and wastewater services if below booster and up to 8.78 percent if above booster. This percentage is high but not surprising given the low income bracket.
“But the 33.6 percent includes both homeowners and renters. Our affordability assessment tool also has the capability to look at the impact of rates on just homeowners—excluding renters. In many cases renters do not pay a water bill directly, but instead pay for their water as part of their rent. Looking at just homeowners can sometimes provide a more accurate representation of a utility’s actual customer base. For Hiawassee, about 29.8 percent of households that own their homes earn less than $25,000, and the amount that they could spend of their annual income on water service doesn’t change—it is still 8.45 percent if below booster and 8.78 percent if above booster.
“What do you know about renters in Hiawassee? Are they paying their own water bills, or is water generally included in their rent? Even if it is included, an increase in the water bill will ultimately lead to an increase in the rent, so they are paying regardless. There are many resources available for you to use if you are concerned about affordability or are interested in customer assistance programs. If that is something you may be interested in, please let us know and we can provide you some resources.
“Finally, we look for other factors that would indicate a potential affordability issue in the community. What percentage of those in the labor force are unemployed? What percentage of residents are not in the labor force at all? What percentage of residents receive social security? What percentage of residents receive cash assistance or food stamps? What percentage of households are below the poverty rate?
“In Hiawassee, some of these numbers are worse than the state and national averages. The three that stand out are the percentage of people not in the labor force (69.6 percent), the percentage of people having income below the poverty level (17.5 percent), and the percentage of people with social security income (68.6 percent). These numbers indicate a vulnerable population, so you may want to consider them should you decide on a rate increase.”
“Sewer and water is expensive,” said Mayor Ordiales, during the March 25 work session. “It’s not cheap.”
A date for the proposed rate increase to move before Hiawassee City Council had not been determined at the time of publication.
Hiawassee City Council convenes for their monthly regular session Tuesday, April 2, at 6 p.m. Public comments are permitted at monthly work sessions, the next which is scheduled April 29.
UPDATED: As previously reported, Mayor Ordiales reminded that a rate increase has not occurred in the past six years, adding that water/sewer has been running at a deficit of $159,000, excluding over $3 million in city debt.