City officials move forward with fee increases

BY DANIEL SEIDL | APRIL 16, 2014 5:00 AM

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Iowa City officials have taken a step toward increasing fees to maintain services.

“Our infrastructure is starting to suffer, and we need some more income,” City Manager Tom Markus said.

The Iowa City City Council passed the first consideration on two ordinances increasing fees for city services on Tuesday. Both of the considerations passed on 7-0 votes.

The first ordinance would increase solid-waste collection fees by 40 cents per month, effective July 1. The current waste fee is $11.40 per month, and this is a 3.5 percent increase, which would total $4.80 increase over one year.

Councilor Jim Throgmorton said this increase is relatively small.

“I think the refuse increases are really trivial,” he said. “The water one is 5 percent for the next two years — that’s much more significant.”

The second ordinance would increase the fee for water use by 5 percent in fiscal 2015 and an additional 5 percent in fiscal 2016.

Both of these fees come as a result of a disparity between expenditures and income in these areas. Mayor Matt Hayek said this is a relatively normal happening.

“Periodically, we look at our rates, whether it’s for refuse collection or water or otherwise, and adjust those rates,” he said. “They have to sustain themselves.”

The solid waste fee increase would generate an estimated $73,000 per year, leading to a projected $11,177 increase in the refuse collection fund in fiscal 2015 rather than a $61,823 decrease.

The water fee increase would generate an estimated $408,392 in fiscal 2015 and $428,812 in fiscal 2016. While this isn’t projected to lead to an increase in the water fund, it will slow the pace of decline. Over the past four years, the fund has decreased approximately 52.9 percent.

Markus said this significant decrease is because the council did not act in the past.

“We had originally proposed five years ago some rate increases,” he said. “Those did not get implemented.”

Hayek said he cannot remember why the council didn’t approve the increase five years ago, but it was probably due to a lack of urgency.

“At the time there must have been a sense that we didn’t have to,” he said. “We are at a point where we now have to.”

While there is some necessity, Hayek said the council is always careful with fee increases because the hikes can make the city a less attractive place to live.

“We take any tax increase or fee increase seriously,” he said. “Cities compete for businesses and residents on various levels including the level of taxation.”

However, he noted, these increases are needed to maintain a good infrastructure.

“At the same time, we know that operating a high-quality water plant … and the like make us a more attractive community,” he said. “We’ll have more money to repair more pipes and do the things it takes to operate.”

Throgmorton said he is concerned about the effect the water fee increase will have on people.

“I understand the staff’s rationale, but it could be a significant cost for ordinary consumers,” he said. “They need to know that the fee increase is coming.”

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