Collierville could raise its utility fee as part of the coming fiscal year budget, but the increase is only about $5 per month for the typical home in the suburb.

Town leaders hired CDM Smith, an engineering company, to provide an analysis of the utility rate — water and sewer fees.

“We are behind where we need to be,” town administrator Molly Mehner told the board in an April work session. “We can probably make it another year, but if we don’t (increase the rate) this year, it’s an absolute must next year.”

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John Fox, director of public utilities, said inflation is impacting utility funds. The utility division’s operating budget is seeing a significant rise in electricity costs needed to run the various pumps and machines. Additionally, chemicals to treat the water have doubled.

As the board considered Fox’s needs and data from CDM Smith, they decided to increase the rate this year, feeling comfortable with a proposed rate schedule for the next 10 fiscal years. The rate analysis considered the average home with three-quarters of an inch meter using an average 7,000 gallons per month.

As part of the budget, the board will consider the larger increase this year. They could adopt more equitable increases in the years following, rather than the immediate option. However, if the increase is approved this year, the average home will only see a $5 monthly increase. 

Mehner said the rate is reviewed annually, but the town will likely stick to the 10-year schedule unless there are unforeseen circumstances. The board wanted to raise the rate with the goal of strengthening the utility reserves in case of unexpected conditions, but there won’t be a surplus of funds until at least 2027.

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The town also plans to pursue automatic meter readers (AMRs) or advanced metering infrastructure (AMIs), probably phasing in the implementation. AMRs allow remote reading within a certain distance. AMI signals reach farther and there are many other features that could benefit the town, Fox said. Studies for the best method for the town are ongoing.

However, newer homes are built with AMRs and town employees currently replace non-functioning meters with AMRs, Fox said. He was unsure if replacing the meters would reduce his staff. As other utility companies have switched to the automated process, they’ve reassigned readers to address maintenance issues. Collierville has five employees designated to read meters.

The implementation of AMRs or AMIs has a $7.8 million price tag, but the replacement of meters will likely be phased, according to Mehner. She said the cost will be financed, but it’s undecided if it is through bonds or another method.

“We went ahead and included it in the rate schedule now knowing it’s an investment we want to make,” Mehner said Tuesday.