Mayor Tony Yarber and Public Works Director Kishia Powell (pictured) want the council to approve a contract with Charlotte, N.C.-based Raftelis Financial Consultants Inc. valued at $200,000.
Photo by Trip Burns.
After shelving discussion last week to get more details, the Jackson City Council is scheduled to vote on a consulting contract today that is likely to result in higher water bills for ratepayers.
Mayor Tony Yarber and Public Works Director Kishia Powell want the council to approve a contract with Charlotte, N.C.-based Raftelis Financial Consultants Inc. valued at $200,000. Under the contract, Raftelis will perform a rate-sufficiency study, assist with the development of the one-percent sales tax master plan and review part of a 2013 contract the city signed with Siemens.
The Siemens deal includes the installation of 64,000 new digital water meters and a new billing system. The contract includes a "performance guarantee" of increased water revenue for the city. Powell said Raftelis would analyze that portion of the Siemens contract.
Raftelis is one of a handful of national firms specializing in water and sewer consulting. Ninety-nine percent of the firm's clients are municipal utilities, and approximately 90 percent of Raftelis' work involves setting water and sewer rates. In many other cities where they have worked, Raftelis' audits have often preceded rate hikes.
"From city to city to city, it was always a rate increase," said Ward 6 Councilman Tyrone Hendrix about Raftelis.
Powell said that Raftelis' purpose is not to raise rates, but to help project revenues in the event that cities choose to implement hikes; that decision is up to the city council, she said. Jacksonians are already dealing with increases passed as part of former Mayor Chokwe Lumumba's budget this time last year. Then, water rates rose from an average monthly bill of $15.54 to around $21, and the average sewer bill increased from $14.50 to more than $31, resulting in $30 million more in revenue.
The city has fallen about $12 million short of the roughly $80 million in water revenue projected for the fiscal year 2014, Powell said. As a result of the revenue shortfall, the city is unable to meet provisions of its bond obligations. In addition, the city is under a federal consent decree to upgrade its wastewater disposal system, which could cost as much as $800 million.
Powell didn't mince words when she addressed the budget committee last week.
"There are cities around the country that are much larger that have a billion-dollar consent decree, and their rates are three times what we have, and they have a much larger population," she told council members. "I think all things considered, you will need to raise rates."
The city council's special meeting takes place at 4 p.m.