Water bill rate increase explained

Recently, the city has received calls regarding unusually high-water bills, prompting customers to question whether the city has raised its utility rates. Indeed, the city's utility rates underwent a significant increase in April.

In this message, I aim to explain the reasons behind this rate adjustment. 

In 2022, the city engaged New Gen Strategies and Solutions to conduct a study on water and sewer rates. During this study, the consultant identified several issues that prompted the city to consider adjustments to its water and sewer rates. Primarily, these adjustments were made due to the projected insufficiency in the financial performance of the utility fund up to 2027 should the city not modify the water and sewer rates.  The necessity for these utility rate adjustments was largely driven by needed capital investments and general inflationary pressures.  

The city’s prior water rate structure consisted of a flat volumetric charge per 1,000 gallons, which neither aligned with industry standards for rate design in water scarce geographic areas, nor did it encourage conservation. To address this, the city introduced a new tiered volumetric rate structure, which increases the cost of water based on a customer’s usage. The tiered system is designed to increase the rate per 1,000 gallons for higher water consumption. For instance, the table below illustrates the contrast between the previous rate structure and the new rate structure for Fiscal Year 2023, based on a three-fourth inch residential water meter: 

Under this new structure, a customer's utility bill is determined by both the meter size (with larger meters incurring a higher fixed charge) and the volume of water they consume. In alignment with the consultant's recommendations, simultaneous to the adjustment in the rate design structure, the city executed a substantial rate hike in April. The percentage of the increase was proportionally linked to a customer’s meter size. 

The majority of residential customers with a three-fourth inch meter experienced a 10.39% rise in both water and wastewater rates. Customers with larger water meters saw an even more pronounced increase exceeding the 10.39% benchmark. 

The new volumetric rates ensure consumers are billed based on their actual consumption and foster greater equity in utility bills by requiring heavier water users to pay more. This principle reflects that those contributing more to resource depletion, capital costs, operation and maintenance costs should bear a greater share of the associated costs.

To conclude, volumetric water rates encourage conservation and uphold the principles of fairness among the customers. 

It’s worth noting that the water bills also encompass a charge for trash service, which saw an increase in February from $13.23 to $22.01 due to the implementation of a new containerized service.