Council halts planned residential sewer increase, discusses lodging tax to fund utilities

Alexander City Council voted Monday to approve an ordinance amending Alexander City Code section 90-66 related to sewer rates and to forgo a planned 7% residential sewer increase for 2025 while discussing a proposed 4% lodging (tourism) tax to generate funds earmarked for sewer improvements.

Council members said the city’s sewer system remains underfunded and described the matter as a multi‑year problem that cannot be solved by a single annual rate change. Councilors discussed plans to pursue a short-term lodging tax that would be earmarked for sewer work for a fixed period (two to three years) and then revert to the general fund. Council members who raised the proposal said preliminary lodging‑tax revenue estimates would yield more than the planned 7% increase (the council discussed an estimate of about $287,000 from the 7% residential increase and said a tourism tax could generate roughly $600,000 in the same period). No formal ordinance to adopt a lodging tax was before the council at Monday’s meeting.

Nut graf: The council’s vote amended the municipal code on sewer rates and, in effect, halted application of the scheduled residential increase while members directed staff to pursue an alternative revenue source targeted at visitors. Officials framed the move as an attempt to avoid increasing the cost burden on local residential customers while still funding sewer infrastructure that council members described as chronically underfunded.

Most discussion focused on balancing immediate revenue needs against longer-term funding strategies. Councilors and staff said the city currently operates below full cost recovery for sewer treatment and capital needs; during discussion a councilor said not applying the 2025 increase would leave the utility “still underfunded by roughly $2,000,000.” Councilors urged rapid follow-up at work sessions to produce a lodging‑tax proposal that could be considered at a February meeting so that any pause in the sewer increase would not indefinitely delay funding.

Councilors described a range of next steps: (1) staff to prepare language and revenue estimates for a targeted lodging/tourism tax; (2) timeline to present a tourism tax ordinance for publication and consideration; and (3) continued work on utility audits, grant-seeking and customer-growth strategies to spread fixed costs. Several members emphasized the legal and publication requirements for ordinances (an ordinance becomes effective only after required publication) and the practical constraints of utility billing systems if changes must be reversed quickly.

Ending: The council approved the sewer ordinance by roll‑call vote. Members said they intend to return with a lodging‑tax proposal and additional financial detail at an upcoming meeting; no lodging‑tax ordinance or formal timeline was enacted at Monday’s session.