Mayor Don Murphy and the Pelham City Council introduced a proposed sewer rate increase Monday during a series of town hall meetings at the Pelham Civic Complex.

Three meetings were held at the complex – one for commercial businesses and two for residential customers – to discuss the proposed increase.

After weeks of deliberating how to offset the more than $12.6 million the Water Sewer Department has lost in the last 15 years, the council is proposing a rate increase and dividing the department into two.

The council has set a date of Dec. 7 to make a decision.

“That money could have been, and can be, used for other projects,” said Council President Mike Dickens of the lost $12.6 million. “There’s only one way to go on this, and that’s to take a rate increase.”

Under the new proposal, large commercial businesses such as fast food restaurants would pay a flat rate of $88 for the first 7,500 gallons, and $11.73 for every 1,000 gallons over that.

Small commercial properties such as small businesses, apartments and trailer parks would pay a flat rate of $60.75 for the first 7,500 gallons and $8.10 for every 1,000 gallons over that.

Residential customers would pay $24.30 for the first 3,000 gallons and $8.10 for every 1,000 gallons over that. Residential customers have been paying a flat rate of $22.

Resident Larry Smith was on hand for one of Monday’s meetings, and he said one of the main problems with the sewer is it bases residential customers’ rates on a 3,000-gallon average, instead of 7,500.

“We’ve never been under 3,000 and we don’t have a pool, which means we’re going to get hit with the increase,” said Smith, who lives with his wife in a single family home.

Resident John Coghill said he feels the increase is just another way for the government to increase revenue.

“The problem I see with government overall is you’re always looking for new funds, but you’re not looking at reducing funds in other places,” Coghill said.

Dickens said the proposed increase will net the city $200,000 per month, instead of the alternative of losing a projected $100,000 per month if no action is taken.

“You can’t operate your household on this kind of budget,” Dickens said. “If we don’t do anything and we stick our heads in the sand, (the debt) is going to go up.”

While sewer rates haven’t increased since 1990, water rates were hiked in 2004 to cover expected federally mandated projects.

Dickens said the sewer increase would also cover expected federally mandated projects without the department having to dip into the general fund reserve.

The city must complete more than $9 million in sewer and water projects over the next four years, and there is only approximately $8 million in the sewer and water reserve fund.

Of the six mandated projects, at least four are expected begin within the next year.

“We have no choice,” Dickens said. “That’s what the federal government says we have to do and when it has to be done by.”

Murphy said it doesn’t help the current situation that the federal government demands certain upgrades be made in the short time frame, but that is something the city must deal with.

Murphy also said with the city of Pelham having to work with the Cahaba River watershed instead of the Coosa River, that means more restrictions and regulations.

“If we could build a straight pipeline to the Coosa, we’d be in great shape,” Murphy said. “But we can’t.”

Murphy said if he had his way, the cities of Pelham, Alabaster, Hoover and Helena would build their own treatment facility through a cooperative effort.