The Phenix City Council voted Tuesday to raise water and sewage rates 5 percent along with a resolution to lift a self-imposed 22-month moratorium on borrowing money.
The two moves go hand in glove as the Council is preparing to borrow about $6.5 million to finance major improvements to the city's waste water treatment facility and other capital projects for the utility department.
The votes on both items were unanimous with Mayor Eddie Lowe and council members Arthur Day, Chris Blackshear and Gail Head voting yes. Council member Jim Cannon was absent for personal reasons.
The current council took office in late 2012 and put the moratorium in place after the previous council had added about $35 million in debt.
In addition to borrowing money to enhance the waste water system, the city will spend about $2.7 million early next year for a new radio system geared to improve communication capability for the city's public safety departments.
"These purchases are mission critical," Mayor Eddie Lowe said when council voted to lift the moratorium. "We are not doing this haphazardly. We are in a great position to service the debt."
The water and sewage rate hike takes effect Aug. 1 for most of the 14,000 commercial and residential customers.
For the average residential customer who uses 6,000 gallons per month, the bill will increase from $39.42 to $41.40.
Phenix City has contracts with the Russell County Water Authority, Smiths Station Water and Sewer Authority and the Fort Mitchell Water Authority. Those increases would take effect Oct. 1, Conner said. The city is required to give those customers a 120-day written notice.
The rate increase is expected to generate between $600,000 and $700,000 annually.
The money to finance the improvements to the waste water facility will likely be borrowed next month, Finance Director Steve Smith said.