The St. Louis Board of Aldermen may face a tough vote this week on a massive water rate hike.
The 40% rate hike, spread over the course of 2½ years, would be the first in the city in more than a decade. Aldermen are expected to give it initial approval on Thursday. If it’s passed, the first 20% boost would kick in on July 1. A second 20% hike would take effect Jan. 1, 2024. Starting Jan. 1, 2026, rates would increase based on inflation.
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The water department is what’s known in city budget parlance as an “enterprise fund,” meaning it gets all its revenue from fees. Over the past three years, there hasn’t been enough money coming in to cover the cost of day-to-day operations.
The department has spent $34 million in its reserve fund just to keep the lights on over those three years and finds itself with just $2 million left in reserves.
“We’ll be in a fiscal crisis” without the rate increase, said Curt Skouby, the city’s director of public utilities. “It will impact our ability to respond and provide service to our customers.”
The department has responded to more than 60 water main breaks since October, including a 60-inch pipe that burst and flooded Interstate 64 near the Zoo during evening rush hour on May 12. On June 9, just days after the rate hike cleared committee, a 20-inch main broke blocks from Ted Drewes in the city’s St. Louis Hills neighborhood.
Crews were able to get to those breaks quickly, said Nick Desideri, communications director for Mayor Tishaura Jones. Without the rate hike, the response “looks a lot different. It’s a lot slower,” he said.
Aldermen on the city’s Public Infrastructure and Utilities Committee seemed to accept the necessity of the increase; in fact, it’s already factored into the water department’s budget for 2024.
“We know what happens to cities that don’t take care of their water systems,” said the committee's vice chair, Alderman Michael Browning of the 9th Ward. “We know that we need to take care of our people, and water is the basis of all life. But I hate that I have to take this vote today because it means that the vote wasn’t taken when it should have been taken by earlier boards.”
A 2016 bill that would have boosted rates by 20% never received a hearing in committee. A state audit released in December criticized the city for failing to raise rates despite four studies showing the necessity.
“As a result, needed capital improvements to the system were delayed and projected costs have significantly increased,” former state auditor Nicole Galloway wrote in a summary. “Additionally, by not performing necessary maintenance of the water system, the Water Division is at risk of violating bond covenants,” or agreements between a lender and a borrower.
Like Browning, Alderman Rasheen Aldridge of the 14th Ward was a reluctant yes on the measure in committee. He understood the need to invest in the water system but was upset with the timing.
The bill was introduced at the beginning of the month, and the public utilities committee held just a single meeting before approving it. The budget that includes the increase must pass by June 30.
Many of Aldridge’s constituents don’t regularly follow local media, he said.
“A vast majority will just see that there was an increase, and not with [their] input,” he said. “I know we have to do this, but I would hope that as this moves forward, we do a better job with trying to engage the community.”
Desideri did not directly answer questions about the compressed timeline.
