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Sunday, January 28, 2018

Message from the mayor: Sewer rate cuts are coming eventually, but water is another matter due to state law

By Grayson Vandegrift
Mayor, City of Midway

I’m pleased to say that it’s my intention to significantly lower property tax rates when the council sets them in August. We’re able to make such tax decreases because of the influx of new revenue from our recent job creation, especially at Midway Station.

But why not lower water and sewer rates instead? I believe we can do that in the near future as well, but I want to explain why it’ll take a little more time to achieve that feat. Our coffers are essentially separated into three funds: a general fund, a water fund, and a sewer fund. The water and sewer funds are known as enterprise funds, because they are in essence a business the city operates.

According to state law, we can’t use general fund revenue to supplement the water and sewer funds: they must pay for themselves. Kentucky American Water sells their product to the city and we sell it to you, basically at cost. We can’t control the rates they set, but when they increased rates recently, we did not pass that on to you – instead we were able to absorb it.

Sewer rates, however, are something we can control, and they have been higher than normal because for 20 years the city has been paying for a sewer plant which failed and a new one built to replace it. Because we’re still paying off the old debts, we can’t lower those rates just yet. But, fortunately, we are going to pay off our old sewer plant this year, and I believe with the right planning we can pay off the current one in a couple of years as well. When this happens, we will be able to lower sewer rates.

At any rate, it’s very exciting to be talking about lowering taxes, not raising them.

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