Peabody City Council agrees to water rate increase
Hillsboro City Administrator Larry Payne met with Peabody City Council members Monday evening to discuss an increase in the amount Peabody pays Hillsboro for its water.
The original contract between the two communities was created in 1999 and Peabody was charged $1.40 per thousand gallons by Hillsboro to treat and transport water to Peabody. The contract also allowed for a review of the payment every two years, with an adjustment if necessary.
In 2005, the cost rose to $1.48 per thousand gallons and has remained there.
Hillsboro is requesting another increase, raising the cost to $1.85 per thousand gallons.
An increase can only take place if the cost of producing water for Peabody increases. Infrastructure upgrades or additions to the water plant itself are not a reason to increase the charges on Peabody’s water.
Payne provided information on costs since 2008 and justification information about Hillsboro’s need to increase the price.
While not enthusiastic about an increase in water costs, council members agreed the amount was justified.
“There is no intent on our part not to partner with Hillsboro on this,” said council member Tom Schmidt. “We appreciate the relationship; we need it.”
Schmidt did ask that Payne let the Peabody budget committee know by June 1 every year if an increase was going to be on the table.
“We need to know going into our budget planning if there is going to be an increase for that year,” he said.
Payne agreed to make that proposal to the Hillsboro City Council, saying he did not think it would be a problem.
The communities will sign a new contract for water charges after Hillsboro City Council has a chance to approve it.