(Spirit Lake)– Spirit Lake residents will still be paying more for water and sewer rates, but the increases won’t be as steep as earlier proposed.
Meeting in special session Thursday, the city council voted five-to-nothing to adopt the new rates.
Instead of seeing a 110 percent increase over three years, it will now be 65 percent. Here’s a breakdown: instead of the 53 and-a-half percent increase in the first year, it will now be 33 percent; the increase the second year will be a little more than 15 percent compared to nearly 26 percent that was proposed earlier; and in the third year the increase will be 7.3 percent compared to the 8.8 percent originally proposed.
Public Works Director Todd Dolphin says they were able to reduce the increases by changing the way some water-related projects will be funded. Instead of coming from the water fund, construction of a new water tower and new water lines will be paid through tax increment financing. Dolphin says the city was recently informed it can legally pay for those items through TIF because the projects represent new growth in the city. In addition, three employees in the Water Department will now be paid from Local Option Sales Tax money instead of through the Water Fund.
There is a draw back though to using TIF money to cushion the blow of rate increases. Dolphin says the city will now have to re-evaluate projects it had originally earmarked for TIF funding.
When it comes to the rate increases and trying to avoid such big jumps from happening again in the future, councilman Jerry Harbst again Thursday recommended a review of the city’s management structure, saying perhaps the city should look into the possibility of converting to a City Manager system.
