News
Opinion
Sports
Business
Community
entertainment
Schools
News
Announcements
Classifieds
Place Ad
Advertising
Contact Us
Archives
Search

Sewer rate hike considered
FUD ponders 13 cents per day increase


First Utility District will consider a sewer rate hike in December after hearing the results of a rate study at its meeting Tuesday, Nov. 29.

“You want your customers to pay their share; no more, no less,” Jim Marshall, of Jackson Thornton Utilities, reported to FUD’s three-person Board of Directors.

The study was based on a 12-month period ending December 2010 and looked at water and wastewater revenues, expenses and how rates matched up to other area utilities’.

In the sewer department, First Utility’s revenue requirements came in at $14,236,382. The revenues generated from ratepayers came in at about $11.3 million, Marshall said. In other words, for every dollar the Utility needed, it is getting only about 80 cents.

“We’re roughly $3 million short of where we want to be,” Marshall said.

That doesn’t mean FUD’s sewer department is in dire financial straits, he added, but it did mean not as many sewer projects could be completed as the Utility would like.


Marshall recommended a rate increase that would cut FUD’s shortfall in half with an increase of about 13 cents a day for residential customers.

“We’d be closing the gap where it needs to be closed,” Marshall said.

“We’d be eating substantially into that shortage,” he added.

The customer charge for 1,500 gallons would be upped from $15.60 to $16.60. The rates for the next 10,500 gallons — per every 1,000 gallons — would increase from $3.30 to $3.80.

Commercial customers would see their rates increase from $15.60 for the first 1,500 gallons to $20.60, and $3.80 for all additional usage.

With the proposed increases, First Utility’s sewer rates would rank among the lowest in area utilities, coming it at about $37.50 for the average residential customer using 7,000 gallons a month.

KUB had the highest rates, at $77.62, and LCUB came in at $63.84.

First Utility’s Board will vote on a rate increase at its Dec. 20 meeting.

The sewer rates would be the only rates to change.

“We’re not recommending any changes to the water rates,” Marshall said.

The water department’s revenue requirement came in at $11,478,644, and Marshall said First Utility actually generated about $11.3 million from rates. FUD’s residential rates, for an average customer using 7,000 gallons of water, are about $22.41 a month.

Those rates are among the lowest among utilities’ in the area, with Hallsdale-Powell coming in with rates at more than $61 and LCUB coming in at just under $38.

According to Marshall, for every dollar First Utility needs to operate the water department, FUD gets 98 cents from ratepayers.

“So we’re not fully funding every project we would like to in a perfect world,” Marshall said.

In other business, the Board:

• Approved a resolution to issue up to $19 million in bonds

The exact amount of the bond issue will be decided after First Utility completes its next fiscal year budget, and likely would be issued in January.

• Approved a debt management policy to comply with new state laws

 

News | Opinion | Sports | Business | Community | Schools | Obituaries | Announcements
Classifieds | Place Ad | Advertising | Contact Us | Archives | Search

© 2004-2014 farragutpress