Woodstock water, sewer fees rise as growth slows

Woodstock citizens pay double what their Cherokee County neighbors pay in water and sewer fees because of rising prices, falling city revenue and new expenses.

Rapid growth, followed by its sudden cessation is mostly to blame.

Even with double the fees, the formerly fast-growing city has had to spend $5 million of financial reserves to pay off water and sewer improvements. That is more than half of this year's $8.7 million water and sewer budget. The city budget is $29.8 million.

Spending such a large chunk of the reserves fund caused Moody's Investor Service to downgrade Woodstock's bond rating from A1 to A3 last February. That is below the average city rating of A2, said Moody's analyst Erin Daugherty, and could cause the city to pay higher interest rates on future borrowing.

Mayor Donnie Henriques said when he moved from the county system to the city system last year, his monthly bill went from about $45 to more than $80.

Costs are high because the city buys water from the Cherokee and Cobb county systems, which together raised rates a total of three times since 2008. The raises ranged from 11 percent to 35 percent.

Woodstock is also paying off loans for expanding sewer lines and building a sewer treatment plant, and there are unexpected costs to replace high-tech water filters at the plant. The filters must be replaced more often, at $1,200 each, because the city cut out a treatment step when building the plant five years ago in an effort to save money. (The cost to replace or rebuild filters since 2006 has been $340,000.) They got bad advice from a former city manager, Henriques said.

The loans would not have been as much of a problem if the city had not planned to pay them off with tap fees it charges the builder of every new home or building, starting at $4,500 for a home and costing more for commercial fees, but those fees plummeted when the housing bubble burst. Tap fees brought in $1.8 million in 2005, which fell to $226,702 in 2009.

"That is a regret," Henriques said. "I was on the council when we passed budgets that included tap fees going into the general fund and using tap fees for paying operating expenses. That shouldn't have happened ... because you can't depend on tap fees. But times were so good back then that everybody thought it would continue. But it didn't."

Woodstock exploded from a country town of 2,699 residents in 1980 to more than 20,000 when suburban growth crested in 2006. New subdivisions sprang up, and downtown Woodstock, a single row of buildings from the early 1900s, attracted a new urbanist development of more than 300 condos, homes and storefronts. Stylish homes of more than half a million dollars sold well until the downturn. Now about one-third of the lots are bare, and development has stopped in three of four new subdivisions, leaving the city few tap fees.

As the economy stays tight, former Mayor Bill Dewrell said, "The unfortunate thing is that the city is just going to keep going up on the water rates."

City Manager Jeff Moon said the city is considering options, such as selling its treatment plant to the Cherokee or Cobb system and joining them. The day of the little, independent water and sewer system is over, especially with the pressures over water usage and availability filtering down from state and national levels, he said.

"The other option is a rate increase," Moon said.