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Jackson paying off sewer bond

By Michael Davis

mdavis@myjpa.com

The City of Jackson will soon be debt free, Mayor Charlie Brown said. City water bills are also about to get cheaper.

The City Council voted, last week, to use $2.1 million from its reserve fund to pay off a bond floated in 1993 for improvements to the Southside and Yellow Water Creek sewer plants, Brown said. Since the bond was first issued, water customers in the city limits have been paying a fee -- attached to their bills -- to pay it off, whether they also used sewer service or not. The fee is currently $10 for residential customers and $13 for commercial users. The city has more than 2,100 water customers within the city limits who pay the fee.

Brown said the 30-year bond originally was for roughly $3.5 million. To retire the debt, he said, will cost $2.5 million, though some $400,000 is already held in accounts associated with the bond that will be applied to the pay off.

"We're taking money out of our reserve fund and just paying it off," Brown said. "We pay this, and we'll be completely out of debt."

Brown said recalling the bond 13 years early will not result in a penalty.

Customers should notice the bond fee removed from their July bills, which go out next month.

But while the bond fee will be coming off, water and sewer customers will see a slight increase in minimum-usage rates.

After voting to pay off the sewer bond, the Jackson City Council voted to increase the minimum rate for up to 2,000 gallons of water from $10.50 to $12. The rate will also go up by $1.50 on sewer bills.

The City Council, anticipating an increase in the cost of providing garbage-pickup service, also voted to hike garbage rates.

Residents who now pay $8.55 per month will pay $10 in July. Commercial customers' bills will go from $18.06 to $20. Brown said the city doesn't reap a profit from garbage service, and absorbs the cost of some services its contractor doesn't provide.

He said the city expects to have to pay more to its garbage contractor next year, and that he felt it was best to make all of the rate adjustments at the same time.

"It's going to keep us from having to go back a year or two from now and have to adjust everybody's rates," he said.

District 1 City Councilman Theodore Patterson said he will be happy to see the bond fees stricken from city water bills.

"That $10 fee for that bond has been sitting there looking them [residents] square in the face for a number of years," he said. "I know, for one, I'd be happy to see it come off."

In all, the rate changes are expected to save residents without sewer service $7.05 per month, according to information provided by the city. Residents with sewer service would save $5.55 per month.

Commercial customers without sewer service would save $9.56 per month after the changes take effect. Businesses with sewer would save $8.06.

Brown said that tapping the city's reserve fund to pay off the sewer bond will still leave an amount equal to about a year's worth of operating expenses for the city.