|
|
|
Independence, MO —
Facing higher operation and maintenance expenses and an extensive capital improvement plan, an Independence Water Department rate increase could possibly go into effect Oct. 1.
The Public Utilities Advisory Board Thursday approved the proposed rate increase, but now it must go before the City Council – a move expected to take place in July – before becoming official. If the increase is approved, it would last annually through Oct. 1, 2016, and would raise the typical residential monthly bill about $1 in each year, excluding taxes and the public fire charges.
Water Systems Director Dan Montgomery said the department usually implements its rate increases in October because it’s an off-season for water usage with customers not watering their lawns as often. The average Independence residential customer has an existing monthly water bill of $16.07, which would increase to $17.04 after the first rate increase.
About one-third of the Water Department’s revenue comes from 11 wholesale water customers. The department and the council must give these wholesale customers at least 75 days’ notice of the rate increase to allow them time to respond or to protest, if desired.
The rate increases were recommended after Black & Veatch performed an outside cost of service study of proposed rates necessary. The Water Department’s 2012 budget, which takes effect July 1, represents a nearly 12 percent increase compared to the actual 2011 budget, in part due to inflation but mostly because of adding back expenses that had been cut from previous years.
“Every time a vacant became open, we held it because we didn’t have enough money ... we could not keep up with the expenses with the rates that we had,” Montgomery said of the approximately 10 positions that were held vacant. “...They can’t all be hired in this first year – we’ll have to get revenue in to hire them back.”
Much like Independence Power & Light, the Water Department is facing two challenges that put pressure on rates, Montgomery said – energy-efficient devices in use by customers and potential regulations from the federal government.
“What we’re putting in is what we know right now,” Montgomery said of the proposed rate increase and federal regulations. “...The water utility hasn’t been hit with that yet, but every day, people come up with new ways to measure (water) ... the technology just keeps getting better and better. It’s finding stuff in water that’s probably always been there – they just couldn’t detect it.
Facing higher operation and maintenance expenses and an extensive capital improvement plan, an Independence Water Department rate increase could possibly go into effect Oct. 1.
The Public Utilities Advisory Board Thursday approved the proposed rate increase, but now it must go before the City Council – a move expected to take place in July – before becoming official. If the increase is approved, it would last annually through Oct. 1, 2016, and would raise the typical residential monthly bill about $1 in each year, excluding taxes and the public fire charges.
Water Systems Director Dan Montgomery said the department usually implements its rate increases in October because it’s an off-season for water usage with customers not watering their lawns as often. The average Independence residential customer has an existing monthly water bill of $16.07, which would increase to $17.04 after the first rate increase.
About one-third of the Water Department’s revenue comes from 11 wholesale water customers. The department and the council must give these wholesale customers at least 75 days’ notice of the rate increase to allow them time to respond or to protest, if desired.
The rate increases were recommended after Black & Veatch performed an outside cost of service study of proposed rates necessary. The Water Department’s 2012 budget, which takes effect July 1, represents a nearly 12 percent increase compared to the actual 2011 budget, in part due to inflation but mostly because of adding back expenses that had been cut from previous years.
“Every time a vacant became open, we held it because we didn’t have enough money ... we could not keep up with the expenses with the rates that we had,” Montgomery said of the approximately 10 positions that were held vacant. “...They can’t all be hired in this first year – we’ll have to get revenue in to hire them back.”
Much like Independence Power & Light, the Water Department is facing two challenges that put pressure on rates, Montgomery said – energy-efficient devices in use by customers and potential regulations from the federal government.
“What we’re putting in is what we know right now,” Montgomery said of the proposed rate increase and federal regulations. “...The water utility hasn’t been hit with that yet, but every day, people come up with new ways to measure (water) ... the technology just keeps getting better and better. It’s finding stuff in water that’s probably always been there – they just couldn’t detect it.
“Because of that, I see in the future that it’s going to continue to get more stringent. ... We’re putting in the rates with what we know as of today, but it could change down the road. Hopefully, it doesn’t happen, but if it does, we would have to address it.”
Water conservation devices like low-flow shower heads, coupled with the economic recession, also are impacting the amount of water sold to customers. In 2011, the Water Department customers used less water, a trend that has fluctuated significantly since a recent peak usage year in 2008.
“The sad thing is that you’re using less water, but you still have construction to pay for, you still have employees to cover – everyone is using less water, but the cost is going up because of rate structures,” Montgomery said. “...Everything is more efficient, which I’m not complaining about. We’re sitting on the banks of the Missouri River ... so water is not an issue here. We can sell all the water that you want us to.”
