Water rate jump planned

Water rate jump planned Harold Holoch, utilities engineer for the city of Vermillion, and Mike Carlson, city finance officer, conduct an information session. by David Lias Vermillion people who drink water, soak down their lawns during a dry spell and wash dishes and laundry will soon discover they will have a little less money remaining after they pay their bills each month.

The city is planning a small boost to its water rates to help finance some much needed improvements to Vermillion's water distribution system.

City officials have calculated that, on average, a Vermillion resident uses 775 cubic feet of

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water per month and is billed $13.16.

That monthly bill will increase after the rate increase takes effect to an average figure of $16.42 or $3.26 per month.

The higher prices will help pay for:


* A South Dakota state revolving fund loan for construction of lime sludge lagoons. The cost of the construction of the lagoons was $788,000, which was financed with the revolving loan fund at 5 percent interest for 20 years. Annual debt service on this loan will be $63,000 per year.


* The annual cost of lime sludge disposal, which totals $31,000 per year.


* A proposed electric rate increase of $32,000.


* An analysis by Banner & Associates of the city's water system recommends several improvements over the next five years, including the replacement of water mains in seven areas of the city over the next five years. "The city has included $66,000 annually in a rate increase to make the necessary water main distribution improvements over a five year period," Holoch said. "The city also recommends retiring the existing 100,000 gallon water tower and replacing it with a new 500,000 gallon water tower at an estimated cost of $1.1 million."


* Controls and pieces of equipment have become outdated at the water plant. Significant improvements at a cost of $52,000 annually are needed.
* Annual increases in operating and maintenance costs are estimated to be $20,000.

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