DAPHNE, Ala. - Customers of Daphne Utilities are facing their second rate increase in as many years, and could pay an average of $125 more per year for water and sewer service than they did in 2009. Rob McElroy, general manager of Daphne Utilities, told the Daphne City Council recently that, “If it were not absolutely necessary, we would not be standing here making this recommendation.” McElroy said the increases would help the utility meet contractual obligations and regulatory mandates beyond its control.

Among the projects that need to be funded are: building a sewage treatment plant that regulates phosphorous at a cost of $5-7 million; installing two additional wells at a cost of $1 million each; adding one million gallons of water storage at a cost of $1 million; and replacing miles of Eisenhower-era infrastructure a cost of several million dollars.

McElroy told the City Council that since the rate increase of 2010, the Alabama Department of Environmental Management and the Environmental Protection Agency have levied more regulations on discharges, and failing to raise rates now would also violate bond covenants on the more than $23 million that was borrowed for previous work on the system.

“If you want to see what that’s going to look like, you can pick up the paper and look at Jefferson County,” McElroy said, referring to the situation around Birmingham where borrowing for sewer improvements is leading to the largest municipal bankruptcy filing in U.S. history.

The utility's board of directors will accept public comment on the rate increase following its regular board meeting Aug. 31 at 5 p.m. in the City Council chambers. If approved, the increase will take effect Oct. 1.