New water rates go into effect in Athens on September 1 as the city enters the last fiscal year under the 2015 water study.

"Anything over the 2,000 gallon base rate now costs $3.24 per 1,000 gallons.

The new rate will be $3.34 per 1,000 gallons. Wastewater is currently $6.07 per 1,000 gallons and will be going to $6.26 per 1,000.

In May, City manager Elizabeth Borstad said the increases have done what officials intended and has placed the city in a much better position than it was in five years ago.

In March 2015, NewGen Strategies, a management-consulting firm, reported that the city had been generating far less revenue each year than was needed for the utilities.

Grant Rabon of NewGen said the city utility needed to have enough money on hand to keep it from being put in dire straits by unforeseen events. He said the city also should have enough in the fund to stay operational for 90 to 120 days and that it should set aside money for capital improvements to replace water mains and other major components of the system.

“You see you were under-recovering anywhere from $1.5 to $2 million per year, under our 5-year forecast, in total, between the water and wastewater if you leave the rates the way they are currently,” Rabon said in 2015. The rates brought about by the 2015 study went into effect in the fiscal year 2016.

Last year, water and sewer fees increased by roughly 3% for all customers, from $3.15 to $3.24. Sewer rates, which are based on water consumption, rose from $5.89 to $6.07 per 1,000 gallons of water used.

.Athens will be getting results of a new water rate study soon, Director of Finance Mandie Quigg said. That will help the city project future revenues.

A Texas Cooperative Extension magazine story explains some of the difficulties for small cities setting water rates.

"Knowing how to set the proper rate for water service is a daunting challenge for small water systems. The rates must be high enough to recover the full cost of providing water, or the system will lose money. But if rates are too high customers will be irate, especially if they believe the

rates are not set up in a fair manner. A proposed rate hike almost always causes a public outcry."