PRWID Board Votes to Implement District Water, Sewer Rate Increases
The Price River Water Improvement District board voted unanimously to implement a $3 water and $4 sewer rate hike effective April 1 at its Tuesday meeting.
The vote followed a public hearing on the matter which drew more than 20 residents. The audience peppered the board with questions, a plethora of concerns and some straight forward recommendations.
Basically, the crowd wanted to know how and why the district got into a financial situation that would require this type of increase.
Boardmember Richard Tatton opened the hearing with a brief explanation of the situation.
"We are $12 million in debt and have to take some action," said Tatton.
PRWID had already instituted some cost saving measures, including leaving several positions unfilled, putting a moratorium on major purchases, looking to contract out to do projects and reviewing any equipment that might be sold off as surplus, pointed out the boardmember.
Tatton then turned the floor over the audience and the board sat quietly taking notes as the comments poured forth.
Lynna Topolovec, a resident of the unincorporated area of the county, led off the comment period.
"I am a little confused about what the board is doing," said Topolovec. "Last year, we hear you are in financial straights and then I read an article that you are looking at raises for employees."
Topolovec sounded the call for homeowners who live in the unincorporated areas and who she said bear the brunt of the sewer line costs.
Topolovec said the bulk of maintenance costs fall on the shoulders of residents who live outside city limits. She said she didn't understand why, if people were hooked directly into PRWID's line, they were still being dinged for the cost of lateral upkeep.
PRWID's continued absorbtion of new development projects raised some red flags for a couple of residents, who questioned whether the water district's existing customers were carrying the burden for growth.
"I've just been concerned there are more and more subdivisions and I wonder if it is causing you to raise rates everywhere," said Maureen Tanner.
Steve Tanner echoed his wife's comments.
"I was wondering if you might consider a moratorium on new hookups," he said.
Steve Tanner also pointed out that the district may likely be throwing away money by not having a thorough hydraulic study to be sure about the water pressure supplying hydrants.
"How can you be sure that you can even deliver the water?" asked Steve Tanner.
Former PRWID boardmember Tom Mathews cut to the chase.
"I realize you need the money, but where's the money going to go?" he asked. "I have never seen a PRWID truck in my area."
Matthews' main suggestion was that, perhaps, city residents who pay a range of fees depending on where they live could kick in an extra $1 a month to help the district out of its financial straights. He then touched on what appeared to be a core issue in the present troubles.
"Five years ago, the board was told by the Utah Community Impact Board to raise rates," said Matthews. "Why didn't you do it then?"
By the public hearing's end, the price of new PRWID logos, and a request to structure increases in yearly increments so customers can plan and a query as to whether the district had tried cut it costs to the bare bones were on the floor.
However, before the boardmembers took turns addressing the multitude of comments, a PRWID employee offered a bird's eye view of what had befallen the district.
Ken Strumph, the district's water plant manager, said he had been with PRWID for 26 years.
"We have trouble keeping employees because of wages, all the equipment is about 30 years old and we are worried about something breaking down and not being able to fix it," pointed out Strumph
The bottom line, the water plant manager said, is that everything was needed to keep the district operating.
"Chemicals and freight costs are steadily increasing," said Strumph.
Boardmembers then addressed and answered the water improvement district customers.
Tatton said a number of factors led to the rate hikes, including static property tax revenues and bond debt.
He explained that tax revenue for entities such as PRWID remained stagnate, which resulted in a deficit in the district's projected budget.
"Last year, we over budgeted the expected tax revenue on the income side," said the boardmember.
In addition, Tatton explained that, when the district borrowed money through bonds, the lending agencies required PRWID to have a money reserve as part of process.
"We felt things would pick up and we started using those for maintenance," said Tatton. "We had to get a backup generator for the water treatment plant."
Borrowing from Peter to pay Paul has left PRWID in default of the agency's bonds, according to Kaye Cripps, the water improvement district's treasurer.
Boardmember Mike Dalpiaz told the residents in attendance at the meeting that he supported the substantial rate hike because of the district's indebtedness problem and what he saw as a need to dig PRWID out and get it on more stable financial footing.
"When I came on this board two years ago, I was troubled to see the debt structure," said Dalpiaz. "We were not paying on the principle nor did we have a cushion as we are required to have on the bond debt. We need to get a handle on our debt.
As for city residents paying different fees than people living in the unincorporated areas, Dalpiaz pointed out that, in the 1990s, the cities had come to PRWID and lobbied for a restructure.
Helper, Price and Wellington cities are responsible for the maintenance of their lines and pass on the costs directly to the residents of the cities.
In regard to subdivisions upping fees, PRWID assistant manager Jeffrey Richens said the developers get hit with all the costs.
He also addressed Topolovec's question about residents who are directly linked to PRWID's main lines having to pay lateral maintenance fees.
The district's assistant manager explained that the lateral is the small line that runs directly to the house and that what she was referring to is actually called a trunk line which collects sewage into the main line.
Steve Tanner's recommendation about the hydraulic study did not fall on deaf ears.
The PRWID boardmembers acknowledged that the study was definitely something they felt the district needed.
"Without a doubt the district needs it (the study)," Dalpiaz said. "But it's a $300,000 to $400,000 bill and we don't know if we can afford another loan. We don't have the liquid cash."
Boardmember Keith Cox summed the matter up for the crowd.
"How did we get here?" asked Cox. "In part, it lies in discussions just like this one."
The boardmember said, in the past when the district had considered rate hikes, residents came and shared concerns just as they had on Tuesday night.
"We were asked by each of you to be responsible but keep our rates as low as possible," he said. "We have tried to keep rates as low as possible and inflation is blowing us off the map."