By Jeff Parish
The Paris News

Water and sewer rate increases are necessary to bring the city’s utilities out of the red, City Finance Director Gene Anderson told Paris City Council members Monday.

Because water usage has never reached predicted levels, the city’s utilities have operated in a deficit for several years, Anderson said. He predicted that by the end of the current fiscal year, the cumulative operating budget shortfall would reach $1.8 million.

"It’s not a matter of making cuts to where it breaks even or almost breaks even and then raise rates a little bit," Anderson said. "We’ve got to work our way out of the deficit we’ve been building up."

Councilman Benny Plata, chairman of the water and sewer subcommittee, recommended eliminating positions and restructuring work shifts at the water and wastewater plants to reduce operating costs.

"These are recommendations to consider because we are in a deficit," Plata said. "I know these cuts are not enough to avoid a rate increase, but we do not have to raise it as much as the study indicated."

A total of 13 positions would be eliminated. At the wastewater treatment plant, two production operators, two maintenance personnel, two maintenance vacancies and one production vacancy would be cut. At the water plant, three production operators and one maintenance vacancy would be cut. Two lift station positions, one employee and one vacancy, would also be eliminated.

The staff reduction would save about $390,000 in salaries and benefits, Plata said. Another $53,000 could be saved through equipment cost reductions, he said.

The water and wastewater plants currently have three shifts — midnight to 8 a.m., 8 a.m. to 4 p.m. and 4 p.m. to midnight. Plata recommended creating a new system with four 12-hour shifts, plus a few eight-hour "straight day" shifts to provide more personnel during weekdays.

Plata also recommended transferring lift station operations from water production to sewer maintenance. Four people should be transferred or hired for the parks department to take care of grounds maintenance currently being done by utility department employees, as well as the sports complex and police station when they are completed, he said.

Paris should also seek bids from private companies to run the water and sewer plants, Plata said. Even if the city did not privatize the plants, the bids would provide a benchmark for judging operations, he said.

Putting together the information needed for privatization firms would take months and would heavily tax nearly every city department, City Manager Michael Malone said.

Councilman Jay Guest recommended the city study operations at the water and sewer plants to see if improvements could be made.

"I don’t doubt that we’re operating well," Guest said. "I just doubt that we’re operating at optimum fiscal responsibility."

The subcommittee never adopted any recommendations for the City Council, so the recommendations were from Plata alone, Malone said. As proposed, the plan would be detrimental to residents and the water and sewer systems, he said.

"It would be a gross mistake to adopt these recommendations brought forward by Mr. Plata," Malone said. "I don’t think Mr. Plata is qualified to make these recommendations, either by education or experience."

Malone said a computer glitch kept city staff from presenting a preliminary budget Monday, but he said he planned to recommend cutting three vacant positions, one in the water department, one in wastewater and one in lift stations.

Staff cuts would have little effect on the proposed rate increase, the city manager said. Consultants have said the city’s debt load is what drives most of the need for a rate increase. Dan Almon from Southwest Securities said because of lowered interest rates, the city could save about $705,000 by refinancing $10.5 million in bonds issued in 1993 and 1994.

About $7.44 million is still outstanding on the bonds, Anderson said. Another payment is due this year out of the city’s interest and sinking fund. The rest could be paid through a proposed $7.19 million bond issue to refund the debt.

The council is scheduled to meet again at 6 p.m. Monday for more discussion about the water and sewer rates.