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Independence, MO —
After remaining stagnant for several years with fewer employees and a drained reserve account, the Independence Water Department is hoping a proposed rate increase will get the utility back on track in doing business.
Just as they did two weeks ago before the Public Utilities Advisory Board, city staff and Black & Veatch Corporation consultants Monday night outlined the reasons for the proposed increase that would take effect on Oct. 1. Council members will vote on that item at Monday’s regular meeting.
If the increase is approved, it would last annually through Oct. 1, 2016, and would raise the typical residential monthly bill by about $1 in each year, excluding taxes and the public fire charges. 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 and $18.04 the next year.
Black & Veatch performed an outside cost of service study, which found that the Water Department’s number of customers decreased in 2010 and 2011. Last year, water usage was up slightly among customers, the report stated, but it’s projected to be down in 2012, based on data through April of this year.
The utility’s 45-day operating reserve also was taken into account when considering how much of a rate increase would be necessary. That reserve, which is usually kept on hand in case of an emergency, won’t be met in 2012, but a rate increase would allow that fund to be built back up, Water Systems Director Dan Montgomery said.
The department also would like to fill about 10 positions that have remained vacant for several years. As more revenue slowly trickles in, the department would like to fill those positions again.
“We started not filling positions as they became open,” Montgomery said. “We didn’t lay anybody off.”
But there is one area that wasn’t part of Black & Veatch’s study and that has no correlation to the proposed rate increase. Some have called into question whether the increase is related to the City Council’s recent budget decision to allocate $221,272 in utility money (including $64,641 in water funds) toward the debt service payment for The Falls at Crackerneck Creek in 2012-13.
That matter has nothing to do with the proposed rate increase, Montgomery said. The cost of service study took place before the budget process and didn’t involve the consideration of debt service payments, he said.
The pressures facing the Water Department, along with water systems across the United States, are systemic, City Manager Robert Heacock said, including the increase of environmental regulations and demands.
“I think our department has been very proactive overall,” Heacock said, “in both the maintenance of the plant and the expansion of the plant to meet future needs of ourselves and wholesale customers, but also with the replacement of mains.
“… If you analyze the rate changes that other communities have had to make, we’re not alone. And yet, we remain near or close to the bottom of rates that we compare ourselves to annually.”
After remaining stagnant for several years with fewer employees and a drained reserve account, the Independence Water Department is hoping a proposed rate increase will get the utility back on track in doing business.
Just as they did two weeks ago before the Public Utilities Advisory Board, city staff and Black & Veatch Corporation consultants Monday night outlined the reasons for the proposed increase that would take effect on Oct. 1. Council members will vote on that item at Monday’s regular meeting.
If the increase is approved, it would last annually through Oct. 1, 2016, and would raise the typical residential monthly bill by about $1 in each year, excluding taxes and the public fire charges. 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 and $18.04 the next year.
Black & Veatch performed an outside cost of service study, which found that the Water Department’s number of customers decreased in 2010 and 2011. Last year, water usage was up slightly among customers, the report stated, but it’s projected to be down in 2012, based on data through April of this year.
The utility’s 45-day operating reserve also was taken into account when considering how much of a rate increase would be necessary. That reserve, which is usually kept on hand in case of an emergency, won’t be met in 2012, but a rate increase would allow that fund to be built back up, Water Systems Director Dan Montgomery said.
The department also would like to fill about 10 positions that have remained vacant for several years. As more revenue slowly trickles in, the department would like to fill those positions again.
“We started not filling positions as they became open,” Montgomery said. “We didn’t lay anybody off.”
But there is one area that wasn’t part of Black & Veatch’s study and that has no correlation to the proposed rate increase. Some have called into question whether the increase is related to the City Council’s recent budget decision to allocate $221,272 in utility money (including $64,641 in water funds) toward the debt service payment for The Falls at Crackerneck Creek in 2012-13.
That matter has nothing to do with the proposed rate increase, Montgomery said. The cost of service study took place before the budget process and didn’t involve the consideration of debt service payments, he said.
The pressures facing the Water Department, along with water systems across the United States, are systemic, City Manager Robert Heacock said, including the increase of environmental regulations and demands.
“I think our department has been very proactive overall,” Heacock said, “in both the maintenance of the plant and the expansion of the plant to meet future needs of ourselves and wholesale customers, but also with the replacement of mains.
“… If you analyze the rate changes that other communities have had to make, we’re not alone. And yet, we remain near or close to the bottom of rates that we compare ourselves to annually.”
