BELMONT — A small increase in water rates is expected to add up to big savings for the village in the long run.

Belmont Village Council recently held the first reading of legislation to adjust water rates for next year and to refinance a loan in order to save the village a significant amount of money in finance charges.

Mayor Stan Sobel and Fiscal Officer Ricky Burkhead unveiled their proposal to council during this month’s scheduled meeting. Burkhead said the Finance Committee had met recently to discuss water rates and money still owed on a sewer project completed 10 years ago.

According to Burkhead, the village has been paying 4.5 percent interest on a $717,000 U.S. Department of Agriculture loan, of which $643,000 still remains to be paid over the next 30 years. He said at that rate, the village will have paid more than $1.15 million by the time the loan is paid off with $543,000 of that amount being interest charges.

Burkhead said he reached out to WesBanco and had been offered a rate of 2.75 percent interest to refinance the loan. He said that would allow the village to pay off the debt in 15 years instead of 30 while saving $406,000 in interest. He added that the 2.75 percent rate was only guaranteed for the first 10 years of the term, but even if the rate increased at that time the savings during the 10 years would still be significant.

He went on to explain that the village currently makes a yearly payment of $39,000 on the USDA loan and that the payments, if refinanced, would be around $48,000 yearly.

Burkhead said he had determined the “debt service” base charge on village water customers’ bills would need to be raised from $20 to $22 per month in order to cover this increased yearly payout.

Council authorized Burkhead to proceed with getting documents ready to issue the bonds and notify WesBanco that the village plans to accept the offer. Burkhead said it would cost $750 for related documentation, due to the large amount being financed.

Burkhead added that despite efforts to save money and cut costs in the Water Department, the village is still behind where it needs to be in that fund. After doing a rate study, Burkhead said he determined that increases to water and sewer rates are necessary.

He proposed raising the cost of water from 7.5 cents to 9 cents per 10 gallons used; he suggested sewer rates be increased from 11.5 cents 12.5 cents per 10 gallons used. He said this would amount to a total $2.50 monthly increase per 1,000 gallons used.

It was explained that a water and sewer customer using 5,000 gallons would, in the end, see an increase of $14.50 per month as opposed to the current rates with $2 being the debt service fee being added to the base charge and $12.50 being from the rate increase. Sobel said that 80 percent of village water customers use 5,000 gallons a month or less.

Water Board President Ken Davis said water customers who live outside the village and are not tied into the sewerage system would not see the base charge increase. Davis also said that representatives from the Belmont County Water Department, from which Belmont purchases much of its water, had been noncommittal when he asked them about possible upcoming rate increases, but that water customers need to understand there is not much cushion in the proposed rate changes so any increase from the county would have to be passed on to customers.

After some discussion, council held the first reading of an ordinance to raise the base rate for water and sewer customers from $20 to $22 per month and to raise the per gallon rates as had been discussed. Burkhead said modifications could be made during subsequent readings to fine tune the legislation, and Sobel stressed that customers who have high water usage can have their usage “profiled” to determine if there is a leak or other problem to blame.

They also added discussion of water rates to the agenda of a special council meeting that already had been scheduled for 7 p.m. Monday to open bids for asbestos abatement of the Belmont school building. Sobel encouraged residents to attend the upcoming meetings so they can hear firsthand the discussions that lead to changes in the village.