The Grantsville City Council began to review options to increase the city’s water rates during a work session last Wednesday evening at City Hall.
The city is looking to raise its water rates for two reasons — to comply with state requirements and generate enough revenue to afford several big ticket construction projects critical to its water system.
Utah Senate Bill 28 from the 2016 legislative session requires retail water providers have an increasing rate structure. As a user increases their water consumption, the price should increase under the bill that was signed by Governor Gary Herbert last March.
Grantsville City’s current culinary water rate structure charges users a flat rate of $15 up to 7,000 gallons, with every additional 1,000 gallons costing 70 cents. With the current rate structure, the additional gallons above the base fee are actually cheaper.
The second reason to increase water rates is to fund upcoming projects on the city’s capital facilities plan, including the replacement of the water main under Main Street. The project is expected to occur in conjunction with Main Street’s reconstruction in 2019.
The city’s capital facility plan was completed by Aqua Engineering, which found the city’s water fund would be on the hook for more than $6.3 million in related projects in the next 15 to 20 years. According to Aqua Engineering, it would take the city 46 years to pay off those projects at the current water rates.
The proposal from Aqua Engineering would charge a base fee of $17 up to 7,000 gallons of culinary water use and $2.55 for each 1,000 gallons above that amount.
Grantsville City Councilman Mike Colson said the Aqua Engineering plan would meet the state requirement as an increase in tier while remaining in line with the amount charged initially. The price per 1,000 gallons is $2.43 under 7,000 gallons before rising to $2.55 beyond that quantity.
“With what Aqua is proposing … that overage fee really isn’t even a fee,” Colson said.
Grantsville City Finance Director Sherrie Broadbent said the city came up with its own proposed water rate structure, which would generate slightly less revenue and include more tiers of use. In the city’s proposal, users would pay the flat rate of $17 and 70 cents for every 1,000 gallons up to 10,000 gallons.
From 10,001 gallons to 30,000 gallons, users would pay 80 cents per 1,000 gallons and from 30,001 gallons to 50,000 gallons of use, the rate would increase to 90 cents. Use above 50,000 gallons would be $1 per 1,000 gallons.
The proposals from Aqua Engineering and city include an annual 2 percent increase. There is no separate water rate structure for residential and commercial users.
For a customer consuming 10,000 gallons of water in a month, they would pay $17.10 under the city’s current water rate structure — $15 for use up to 7,000 gallons and $2.10 for the additional 3,000 gallons. Under Aqua Engineering’s proposal, the same customer would pay $24.65 for the same 10,000 gallons — $17 for the usage up to 7,000 gallons and $7.65 for the additional 3,000 gallons.
Based on the city finance department’s proposal, the customer consuming 10,000 gallons would pay $24, with $17 in a usage fee and $7 for water used.
A side effect of the rate increase is an expected decrease in water consumption, especially during peak months. Last July, there were 26 residential customers who used more than 100,000 gallons of culinary water of the city’s more than 2,800 users.
Under the city’s current rate structure, it would cost a customer $85 to use 100,000 gallons. Under the proposals for a rate increase under Aqua Engineering and the city, the same usage would cost $254 or $108, respectively.
“You don’t want them to quit using water altogether,” Broadbent said. “You just want them to think about it. You want them to try and conserve.”
The city council is expected to revisit the water rate increase during future city council meetings and none of the numbers proposed last Wednesday are final figures.
“What we want is a fair price that reflects our actual cost of operation and funds future maintenance costs,” said City Councilman Tom Tripp.