The Gainesboro Board of Alderman approved a resolution Thursday night to raise water rates over the next five years.
Engineer Nathaniel Green said the increase will cover payments on the expanded water treatment plant project. Green said a financial analysis from the State Revolving Fund determined a revenue shortfall by fiscal year 2029 without the increase.
“That revenue shortfall, they have estimated at some 39 percent,” Green said. “And so that means they need cognitive action to be taken toward effectuating rate increases.”
The project totals $10.5 million. Thursday’s action made Gainesboro eligible for some $4.2 million in loan forgiveness, meaning it could only pay $6.3 million for the project.
Green said the loan will carry a low interest rate. Although he is unsure of the exact number, Green said interest rates on this kind of loan typically are under two percent. The interest will not be paid on the forgiven $4.2 million.
Mayor Lloyd Williams said increasing the rates was a necessity.
“I mean [the resolution] kind of goes with everything we’ve been about,” Williams said. “We’re going to have to raise rates. And if we don’t do it, we’re going to lose $4 million dollars, and we’d probably have to raise them anyways.”
Green said the financial group Jackson-Thornton will propose an increase structure, to help the city protect residents as much as possible.
“Typically, they provide you with a tiered increase that you can apply by resolution,” Green said. “You don’t have to keep coming back and doing it. Basically, once you have those passed through the ordinance readings you do, you will have basically established what your future rate increases will be until 2029.”
Alderman Tom Goetz said he was hesitant to vote because Alderman Beth Young was absent. He ended up voting in favor of the resolution because he said the $4.2 million in loan forgiveness was too good to pass up. The motion carried unanimously.
Gainesboro’s water treatment project has been in the works since 2022. Jackson County’s status as an at risk county, along with other municipalities losing their eligibility helped make the city eligible for loan forgiveness.
There was no ordinance passed at the meeting because it was too late to amend the agenda, but the resolution stating Gainesboro would commit to raising water rates was enough to keep their eligibility for the partial loan forgiveness.
Green prepared and proposed the resolution and presented it to the Aldermen. The resolution included the agreement to raise rates, as well as to submit proper documents in the near future.
In other business, Public Works Supervisor John Pigg was given approval to seek bids for a commercial lawnmower and mulch for the city park.
Aldermen approved opening an account for West Farms Construction for a raw water line. Essentially, this savings account will hold funds to be paid to the contractor at the project’s completion.
