By NEAL WAGNER / City Editor

Pelham Mayor Gary Waters said he would be in favor of reducing the city’s sewer rates over the short term while working to tie future rates to the “actual cost of operating the service.”

Waters’ comments came during a Jan. 28 Pelham Water Board meeting, which marked the first time the entity has met in years. During the meeting, the Water Board, which is composed of Waters and the City Council members, discussed ways of addressing sewer rates Waters said currently are “too high.”

“As long as we say the rate will be set based on the actual cost of operating the Sewer Department, I’m OK with that,” said Waters.

Water Board members said they plan to examine the Baton Rouge, La., sewer rate plan. Through the Baton Rouge plan, residential and commercial customers’ pay monthly sewer rates year-round based on their average water meter readings for October-December and February-April.

“I would be in favor of passing something like the Baton Rouge plan,” Waters said. “This (meeting) is the springboard that will start the dialogue.”

Water Board member Rick Hayes said Pelham’s sewer rates were among the lowest in the Birmingham metropolitan area before a series of rate increases were passed by the City Council in 2009.

In 2009, the council narrowly approved an incremental sewer rate increase, and said the increase was necessary to help fund several state-mandated upgrades at the city’s wastewater treatment plant and to offset an about $1 million annual transfer from the city’s general fund to the sewer fund.

Waters said the two sewer rate increases, which went into effect in 2010 and 2011, each generated more than $900,000 in additional revenue for the Sewer Department, and said upgrades to the city sewer treatment system have been paid for using reserves.

“Right now, I can’t look anyone in the face and tell them why we are charging what we are charging,” Waters said. “The general fund transfers were done from the beginning to keep our rates down.”

Hayes said the average residential customer paid a $22 sewer rate before the two rate increases, compared to about $38.90 today.

Pelham Public Works Director Eddy Jowers said the city may have to spend $10 million to $15 million to construct a filter plant to meet Alabama Department of Environmental Management phosphorous levels by 2022.