Auditor says city water rates may need to increase

An annual city audit says the city may need to eventually consider increasing water rates after lower-than-normal water revenue in the 2002-2003 fiscal year.

The low revenues caused the city to be out of compliance with covenants that govern about $8.4 million in bonds the city sold to upgrade the city water plant, auditors said. The covenants require the city's water bill revenue after paying for its operating costs to be 125 percent of the principal and interest owed in a given year. Part of the money is meant to be put aside into a reserve fund.

The city needed to raise $850,000 to cover th...