By Angel Perkins News-Mirror Editor
When Bourbon Town Council members learned results of a report from Umbaugh and Associates of Plymouth, they agreed something had to be done. Eric Walsh and Steve Carter, representing the CPA firm, gave a detailed narrative of Bourbon’s utility accounts showing gathered data and comparison results and suggested a 5-year plan to encourage the town not be regularly working “with a negative cash flow.”
The company used a process of a three-percent inflationary trend, looking at operation costs but not including rising fuel and chemical costs, or the latest government requirements. They looked at past and future capital improvements, outstanding bonds and water utility collections (payments received) to get a fair perspective.     “We looked at rates for a population of your size and compared them to 120 like towns,” said Walsh. “On the wastewater alone you would need a 20 percent increase to bring you up to where they’re at.”

And the utility company, while also a service, is a business that must be run with a regular profit, not a building amount of loss. “By raising the base rate and the usage rate, by 2010 you could be operating (the water utility) without depleting cash reserves,” Walsh added. “How aggressive you want to be about that is entirely up to you.”
Town Clerk-Treasurer Kim Berger noted that the average family’s water (and trash) bill runs about $60 to $80 and that there has been no increase in water (usage) rates since 1996. “And this is our last year in our five-year trash contract,” she said. “I can guarantee that rates will go up with some type of fuel surcharge.”
The last time the storm water rates were raised ($3 to $6 a month) was in 2005 and the last sewer water increase was  in 2006; it went up one dollar a month. Council president Larry Wattenbarger, who has had 10 years on the council said, “We had a board member that simply would not raise water rates; it’s wonderful not to raise rates but that just isn’t realistic. Now we have an issue on our hands.”
Council member Tim Perkins suggested raising rates only 15 percent and then progressing smaller increases in consecutive years in the future. “Then it might wear off the immediate ‘sticker shock,’” he explained.
Umbaugh’s Carter said, “If you wanted to go 10 percent (for either sewer removal or water usage) and then next year, another 10 percent you could.” He explained that often with smaller towns, the raises in rates are conducive to improvements and capital project needs.
“Trends show smaller towns don’t raise rates as often but when they do, it’s a larger amount,” he said. “Your rates structure hasn’t changed in more than 30 years.”
It was also noted that bigger cities have more people to spread the increased amount throughout, and if their percentages are raised a large amount, that higher fee isn’t necessarily reflected as very large amount on the individual bills.
Utilities Superintendent Mike McFarland told the council that maintenance costs are constantly rising due to parts and fuel costs rising and that a new Vactor truck, to use for  many of the town’s duties runs nearly $260,000.
“The Vactor we have now is one of three in the United States that is still running,” he explained. “Some of our supplies’ costs have gone up as much as 15 percent in a month.”
Other projects for the immediate future that would generate additional costs for the water department include the Thompson Street flooding and drainage issue which is projected to cost around $8,000, government emergency computer program requirements and replacement water lines throughout the town.
“We have three miles of galvanized mains that are two-inch lines that need replaced,” explained McFarland. “The state minimum is six inches and the ones we are running are more than 20 years past their ‘life.’ We’re looking at maybe 1.1 million dollars.”
Carter said that if those capital improvement figures are fair estimates and fuel and other costs continue to rise, the town could need to raise the water rates as much as 50 percent in the near future. “If improvements keep getting put back and costs continue to rise your costs are also going to reflect that and accumulate significantly,” said Walsh.
Wattenbarger said he was concerned about those living on fixed incomes and agreed with Perkins that perhaps they could make the increase not as harsh by splitting it over the time period. “I know nobody’s going to be happy about this and the ones that go out of town for the winter aren’t going to want to pay for water while they aren’t here, but we can’t say, ‘it’s this way for you and this way for you.’ It has to be fair across the board.”
“Every year that it’s put off we’ll get in deeper and deeper,” Perkins said. “Sooner or later this (improvements and a rate hike) has to be done. As it is, it’s so much because it was put off for so long. And I’m looking at it as a customer with a household (usage) of five, and I have to pay my (water) bill two weeks late most months as it is.”
“So we’re looking at about a $5 increase across the board per customer per month at a minimum,” council member Gary Collins queried. The accountants said his supposition was a fair expectation. “I just want to make sure that these improvement projects, the purchase of the Vactor truck, are all necessary and that they are regularly put to use,” Collins said.
Presently the council is looking at a 10 percent increase, per water utility (10  for waste/sewage water, 10 for usage), projected to begin in June or July of this year with another like hike to take place in May of ‘09. At the next regular meeting (March 11) council members will further discuss the issue, look over the ordinance for the projected rate hike and will schedule a public meeting to take place in April for customers to ask questions.