Troy residents could see changes to their sewer and water rates under recommendations presented to the city council on Tuesday.

Jim Marshall of Jackson Thornton Utilities Consultants met with the council members during executive session on Tuesday to share the results of a cost of services study conducted by the firm.

   Marshall’s firm conducted an analysis of the electric, water and sewer systems comparing the cost of service to the rates and revenue. “The goal with utilities is to have enough money to operate how you want to operate and to have fair and equitable rates,” he told the council members.

The firm recommended no changes to the electric rate structure, citing anticipated expense reductions related to the city’s contract with a new provider.

For the water service, the firm recommended the gradual elimination of the 3,000-gallon minimum usage threshold for residential, rural and yard meter customers only. Currently the city charges a flat rate of $10 per month, which includes up to 3,000 gallons of water usage. Additional charges apply for each additional 1,000 gallons used, starting at $1.25 per month. “We recommend decreasing the amount included in the minimum bill by 1,000 gallons per year for three years,” Marshall said, adding that the minimum charge would remain the same.

Under the plan, customers during the first year would receive 2,000 gallons of water for the $10 flat charge, then pay $1.25 per 1,000 gallons up to 10,000 gallons, with the additional step charges for additional usage remaining the same. Marshall said the average residential customer usage in Troy is 4,600 gallons per month.

“You’d basically phase out what you’re giving away,” Marshall said, adding “the industry as a whole is getting away from giving water away.”

The change would generate approximately $243,000 in revenue over the three-year period.

In addition, the firm recommends increasing the basic residential customer sewer charge by $6 per month over three years and the commercial customer sewer charge by $4 per month over three years. For residential customers, the basic sewer charge would increase by $2 per year, from $10 per month to $16 per month. The change would generate approximately $392,000 in additional revenue over the three-year period.

“You’re losing money at the current level,” Marshall said, adding that Troy’s rates are well below state averages and would remain lower than average with the increases.

The city’s last increased electric rates in 2012 and sewer and water rates in 2013.

Council members took the recommendations under advisement but took no action on the proposal.

Council members also met in executive session during the work session to hear an economic development proposal.

In other business on Tuesday, the council during its regular meeting:

• Held a public hearing then approved Ordinance 383, which makes several changes to the zoning ordinance. Among those are adding a Tourism Development District; addressing specifications on principle dwellings and structures; updating current practices for building permits; detailing methods for interpretations and appeals of interpretations of the zoning ordinance; and addressing building setback line and building line definitions.

• Approved a one-day, special usage liquor license for the National Wild Turkey Federation fundraising dinner.

• Approved a budget amendment of $87,100 for the Troy Fire Department for equipment purchase.

•. Awarded a bid to Trailer World for 25 recycling trailers, including eight open top and 17 closed top. The city will utilize a $76,000 grant for the bulk of the purchase, and net cost to the city is $2,970.

• Approved the issuing of warrants for $2.1 million in temporary funding for the Kimber Manufacturing project. The city will use the funds to repay a loan for South Alabama Electric Cooperative used to build a spec building and for the early stages of the project, as a permanent financing source is secured.

• Heard from Tommy Lowery, a business owner and resident of Heritage Ridge, who expressed concerns over potential environmental impact from the Conecuh Ridge Distillery project. “After some research of a fungus that follows distilleries, I would like to pass this information on,” he said. “If you can’t relocate the distillery to another area, and you stand firm to protect their interests, then I ask you to take the next step and do ‘due diligence’ to protect our investments and interests against this fungus.” Lowery said studies have shown that the Baudoinia Blight fungus is a by-product of off-gassing alcohol processes and causes black mold to form in surrounding areas. He asked the council to “diplomatically require” Conecuh Ridge Distillery to install a thermal oxidizer, which is not required by law but could reduce the potential impact of the fungus.

Mayor Jason Reeves told Lowery he had passed the information onto company representatives, and Councilwoman Stephanie Baker said she has asked the Alabama Department of Environmental Management to review the issue and provide a recommendation and report.