Water customers in Alabaster will see a rate increase this January, as well as a change in the way water bills are sent out.

At its December meeting, the Alabaster Water Board voted to increase water rates by an overall 12 percent,

according to

Water Department General Manager Jeanette Minor.

Minor said that while a 17 percent increase in rates &uot;is necessary to fully cover the cost of providing service, the Water Board has elected to increase rates in a two-step process.&uot;

&uot;The Water Board plans to increase rates by another 5 percent in January 2005,&uot; she said.

Minor said the board has also taken other steps to reduce expenses such as refinancing a portion of its debt, reducing employment by 5 percent, implementing a cycle billing procedures to avoid increases in staff levels and by contracting with a firm to review utility bills to further reduce costs.

Minor said the rate increase includes a price hike from $7.50 to $9 for the first 2,500 gallons of water and an increase of 7 percent for each tier above that amount.

She said for example, customers currently pay $2.50 per thousand for the next 12,500 gallons (up to 15,000 gallons). Under the rate increase, she said, they will pay $2.70 per 1,000 gallons for the next 12,500 gallons.

She said a customer who uses 9,000 gallons in a month will experience an increase in their bill from $23.75 to $26.55.

Minor pointed out that the minimum bill applies to three-quarter-inch meters only. She said the Water Department has meters ranging from three quarters of an inch to four inches in diameter.

Minor said the increase in the minimum bill more closely aligns the recovery of revenues with the costs the board incurs to service each meter. She said the new rates will go into effect on Jan. 1, 2004 and will be included on the bill received by customers in February.

Minor said the rates apply to both residential and commercial customers and the rate increase is the first by the board since April 1998. She also said the board is trying to cover a $170,000 deficit in the operating budget.

According to minor, for the January 2005 increase, the board has not decided whether it will be applied to the minimum bill or the other tiers.

Also, according to Minor, the board will begin billing customers in separate cycles. Currently, she said, the board bills 12,000 customers at the same time with payments due on the 15th of each month.

Beginning with the February 2004 bills, half will be mailed at the first of the month with a due date of the 15th. The remainder, she said, will be mailed on the 15th with a due date of the 30th.

Bills for customers on routes one through 34 will continue to be mailed on the first of the month while bills for customers on routes 35 through 81 will be mailed on the 15th.

Minor said during the first two months transition to cycle billing, customers can expect to receive bills of a longer or shorter duration of read time, but after that, bills will be for a 30-day period.

Minor said cycle billing will allow the board to better serve its customers without increasing the number of staff employed by the board.

According to Minor, however, &uot;The Alabaster Water Board’s most pressing issue is acquiring additional water supplies.&uot;

She said the board is &uot;concerned about meeting peak needs during the summer, especially during drought seasons.

&uot;(The Water Board) has been active in searching for new supplies, but to date, its efforts have not proved fruitful.&uot;

She said that during the past few years the board has investigated building a pipeline to a neighboring municipality to bring water to the system, it has drilled wells that have not been successful and is currently in consultation with Shelby County on the county’s plans to obtain additional water from the Coosa River.

She said the acquisition of new supplies will result in increased costs to operate the system, and these costs &uot;are not&uot; included in the rate increase.

According to Alabaster Mayor David Frings, the Water Board is a separately incorporated entity from the city and does not require council approval for rate hikes