Chemical Price Increases Impact Utilities Budget

Utilities Division - June 10, 2008
Contact: David Saunders, 747-7303

Members of the City/County Utility Commission learned yesterday that the Utilities
Division will have to spend almost $759,000 more than budgeted for fiscal year 2008-
2009 to buy chemicals used at water- and wastewater-treatment plants.

At its meeting yesterday the commission approved contracts for chemicals that have increased in price by 7 to 137 percent compared with last year. The price increases are being driven by rising oil prices and shortages in raw materials, Utilities officials said.
To offset the shortfall, funds from the 2007-2008 budget for chemicals will be carried forward to the 2008-2009 budget, Utilities Director David Saunders said.

"The commission is not going to raise rates directly because of this steep increase in chemical costs," Saunders said, "but if we end up using all the chemicals we've ordered and need more, there is the potential we may need a mid-year adjustment."

The chemicals in question include liquid aluminum sulfate and ferric chloride, which remove sediment and impurities in water; caustic soda, used to adjust the acidity of the water; sodium hypochlorite, a disinfectant; fluorosilicic acid, used to fluoridate the water; and zinc orthophosphate, used to prevent lead and copper from leaching out of home plumbing and fixtures.