Sales tax applied to sewer rates

After reviewing three options concerning increased sewer rates, the McCook Council unanimously approved one that used the most sales tax and with less impact on customer fees in the future.

The council approved on first reading Monday night at its regular meeting a $1 per month increase in residential sewer bills and $1.55 per month for commercial users.

The rate increase will go through two more readings and go into effect Oct. 1.

With this option, the council also approved using $150,000 in city sales tax dollars applied toward sewer debt incurred for improvements, reduce capital outlay expenses by $25,000 and set rate increases for 2009-10 at 5 percent.

This option provides for an ending fund balance of $490,000 for 2008-09, the highest of all three options.

The two other choices council looked at included a 7.5 percent increase, about a $1.48 increase per month for residential users, or a .50 cent increase per month for residential users, plus $100,000 of city sales tax money applied toward sewer debt and capital outlay expenses reduced by $25,000.

The seven percent increase came with a $307,000 ending fund balance and rate increases in 2009 at seven percent and a 6.5 percent in 2010. The .50-cent increase meant a $420,00 ending fund balance and a 7 percent increase the next two years.

Councilman Aaron Kircher questioned the prominent difference between the first option of a 7 percent increase and the options that include city sales tax money.

"The difference just jumps out," he told Jesse Dutcher, Public Utility Director. Dutcher said the same format is used for the spread sheet calculations and he was confident of the estimations. McCook City Manager Kurt Fritsch added that it doesn't take a lot to make a big change in the estimations, especially when coupled with reduced capital outlay expenses and city sales tax proceeds tacked on.