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Rate studies are performed to ensure the current rates and rate structure provide the revenue needed to recover costs required to operate water and wastewater utility systems. The city acquired services from Raftelis, a third party consultant experienced in helping local governments and utilities improve their financial foundation while minimizing the impact on the people, to conduct the rate study.
The City occasionally examines water and wastewater rates and structures to ensure we are able to adequately fund water and wastewater utility systems, including all costs associated with operating, maintaining, and expanding utilities. Since 2022, the city has experienced a substantial rise in costs associated with supplies required to operate our utility systems, such as fuel, chemicals, etc. In addition, the city engineer has identified several key projects necessary to ensure we continue running efficiently while meeting current and future demands.
During the rate study, Raftelis discovered utility rates and fees are not adequate to ensure the city can provide affordable and reliable service in the future. They also determined that not all users were being charged for what they use and that wastewater customers are paying around $.77 per 1,000 gallons when the city is actually paying $1.44 per 1,000 gallons. The current rate structure does not incentivize wise water use.
A rate structure includes the elements that make up the total amount paid for water and wastewater services. The rate structure includes a fixed fee and a volume charge. A fixed fee is a flat fee based on the size of your water meter. A volume charge is the rate you pay per one thousand gallons of water you use.
Lower fixed fees for residential customers to help achieve more affordable rates. New fixed fees for commercial customers to match industry standards. This will help ensure that everyone is paying their fair share.
Residential customers volume charges will be moving from two tiers to a four tiers and changing the volume allotted for each tier. This is to encourage wise water use.
Residential water customers who use less than 10,000 gallons will likely experience a decrease in their bills while those who use over 10,000 will probably see an increase. Commercial water customers who are lower water users with smaller meters will more than likely see a decrease in their bill while higher users with larger meters will probably see an increase.
An increase to the fixed fee for meters 1" are larger, but everything under 1" the fee will stay the same. Removing the wastewater cap for all customers to ensure the city recovers the costs associated with the wastewater system while providing the ability to make necessary investments to infrastructure to ensure it stays functioning.
An increase across the board for all users. However, lower water users will see a lower increase than higher users.
Bottom line, the more water used, the bigger of an increase customers will see.
New rates will take effect January 1, 2024.