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VIDALIA, La. — Water rates will have to increase for Vidalia residents in order for the town to not be cut off from state funding, Mayor Buz Craft said to the regular board of alderman meeting attendees on Tuesday.

“We’re looking at a possible water increase now because we’re extremely low, and it’s state-mandated for us to be turning a profit or else, they’re going to cut funding,” Craft said. “If you’re not charging enough for your service to turn a profit to maintain your systems, you’re going to the state to bail you out. There’s a bill now that says (the state) is not going to allow that.”

A rate study for the town is currently being conducted by the Louisiana Rural Water Association to determine the rate difference needed, Craft said, adding he’s expecting an update within the next few weeks.

Meanwhile, the mayor asked the alderman on Tuesday to consider using interest collected off of invested hydroelectric royalties to help cut back on other rate hikes.

Over $19 million of hydroelectric revenues invested in Louisiana Asset Management are earning interest income.

Gains of $407,000 have been seen in only five months, according to CPA Debra Moak.

Craft asked aldermen to consider the town becoming self-insured to potentially save the town from interest rate hikes. First, they would need to see if it is legal, Craft said.

The town ordinance states clearly how hydroelectric revenues can be spent, “and we don’t want to violate that ordinance,” he said.

“Inflation has been rampant, and interest rates have increased. We’re always looking at ways to be frugal and save the town money. … There are municipalities that can’t even get insurance south of I-10,” Craft said.

Brent Smith said being self-insured is somewhat of a gamble. The right storm could cost the town millions.

“I’d hate to watch these funds build up and then all of the sudden disappear, feeling like I’m at the casino,” he said.

Historically, property losses from natural disasters covered by insurance average around $200,000 a year, officials said.

“At the current rate — with insurance going up, landfill costs, and natural gas — at some point, we’re going to have to go to the people for an increase and I’m trying my best to stop that,” Craft said.

No action was taken during Tuesday’s meeting on increasing water rates or using the hydroelectric royalty investment revenue.

In other matters, the board passed a resolution to apply for a sidewalk grant from the Federal Highway Administration Recreational Trails program to construct a sidewalk connecting the Vidalia Upper Elementary School to the riverfront.

An ordinance was also approved Tuesday to amend the industrial rate structure for electric power, water, sewer, and garbage collection. This ordinance change does not increase the town’s rate but lowers the rate for industries with very large consumption, like Syrah Resources and BASF.

“Syrah (Resources) is really increasing their load to almost have a load larger than our whole town,” Craft said.

Industrial businesses are not subject to the rebates that town residents receive, although they consume more power. Craft said that giving those industries a lower rate gives them a break and makes the town competitive with other places where those industries can buy their power.

The previous ordinance requires a 12-month look-back period measuring an industry’s consumption before a reduced rate is granted. However, the change adopted Tuesday allows the mayor and a special committee to meet and grant an exception to that rule.
“(Syrah’s) consumption is constant and doesn’t go up and down,” Craft said, adding, “We’d be doing them an injustice to leave it like it is.”

Officials also approved a waiver allowing the sale and consumption of alcohol on the Vidalia Riverfront festival grounds during the Juneteenth Celebration for this Saturday, June 15, only.

Activities include a Music and Blues Concert at the Vidalia Riverfront from noon to 8 p.m. Saturday.