ECC water rates may flow uphill
East Carbon residents have been enjoying low rates for water for a long time with relatively few changes made over the past 10 years. But those days may be numbered as the city council will begin looking into the issue of raising water rates beginning in late May.
According to both state and federal data, water rates in East Carbon are so low, they may need to be raised significantly in order to meet the average water rates that other cities are paying.
The topic of water rates was brought up at city council meeting on Tuesday night during a presentation by Jay Mashburn, a rural development specialist with the Rural Community Assistance Corporation. Mashburn gave a Powerpoint presentation that showed water rate and base rate data of East Carbon compared to other cities in Carbon County and the state of Utah.
Water rates equity is measured by the State of Utah Division of Drinking Water as a function of the Median Adjusted Gross Income (MAGI) per household. The reason for the median being used for incomes is so that there is not a dramatic difference that sways the average rate with people who have little to no income compared to people who may be millionaires.
In 1997, Utah's MAGI was around $30,000 and in 2009 the number was at $36,655.
In 2009, East Carbon's MAGI in 2009 was at $26,320. Other cities in the Carbon County were much higher, including Sunnyside at $34,789, Wellington at $35,643, Price at $37,480 and Helper at $39,448.
In determining water rates another form of calculating the amount residents should be paying for water is the maximum affordable water bill. The Utah Division of Drinking Water evaluates projects for funding and in the process they find the maximum affordability by calculating the local MAGI by 1.75 percent for the year.
With East Carbon's MAGI in 2009 listed at $26,320, the maximum affordable water bill for residents per month is $38.38 ($26,320 x .0175 = 460.6 / 12 = $38.38). This figure, in addition to the MAGI's of other local cities, is much lower. The other lowest maximum affordable water bill in the area is Sunnyside at $50.73. Wellington is listed at $51.98, Price at $54.66 and Helper at $57.53. Utah's maximum affordable water bill in 2009 was at $53.46.
Water rates in Helper, Mashburn explained, are about three times higher than those of East Carbon. For example, a monthly bill for using 135,000 gallons of water in East Carbon would have a resident pay $206.75 compared to Sunnyside at $417 and Helper at $657.
"The current rates for water in East Carbon are providing a heck of a bargain for the people in the area," Mashburn quipped. "But they will need to come up for sure."
The federal state revolving fund prioritization is another tool that is used in determining applicants for funding. For East Carbon to be placed on the list for consideration of funding, water bills would need to be $26.54, Mashburn said.
According to the Department of Labor Bureau of Labor Statistics, the water, sewer and trash collection Consumer Price Index (CPI) percentages in 2002 were at 3.1 percent and in 2010 it was at 6 percent. Mashburn presented an equation that took the cumulative percentages over the years (55.67 percent) for inflation of the services and found that the current base rate for East Carbon should be $24.19 ($15.50 x 1.5567 = $24.19).
The percentages for inflation have slowly been building over the last decade and the city is now $9 behind because of what inflation has eaten up, he said. The last time East Carbon water rates were adjusted was back on May 1, 2002.
When looking for federal or state funding, Mashburn said that cities may have been able to "sneak through the door before", but now they can't.
"Everyone will eventually have to follow this pattern [of adjusting water rates]," he said.
In a bit of irony, the lowest water users may be hurting the most from the low base rate of $15.50. Elderly people on fixed incomes are much more likely to be using a smaller amount than the allotted 6,000 gallons of water. But with the base rate at in its current state, they are paying much more per gallon of water and they may even be subsidizing high volume users, Mashburn explained.
One of the things the city will need to look at closely is the agreement they have had with their neighbor just a mile away, Sunnyside.
Sunnyside is charging two times as much for water compared to East Carbon, Mashburn noted. It is one of a number of contributing factors that has the system running much lower than it should be, instead of breaking even.
"Sunnyside is like the teenager living at home with the parents for free," Mashburn said.
East Carbon City Mayor Orlando LaFontaine said he was worried that the city was subsidizing the use of water by others, including Sunnyside, which then hurts the city in the end.
The council was in full support of revisiting the water agreement with Sunnyside, which was passed as early as 1993, according to Councilwoman Cheryl McFarland.
Councilman David Avery said that both low and heavy water users in the city will probably have a lot to say about the possible changes in rates.
"We'll hear about it from both sides of the spectrum," Avery explained.
In May, the city will begin discussions and will hold a public hearing for the public to learn about what can be done to help fix the situation. LaFontaine said he wants to keep the public informed and have them involved as much in the process as possible so they have a good understanding about what is going on and know ahead of time about any possible increases for water.
The discussions in May will need to focus on two main points including the raising of the usage rate and looking at the agreement with Sunnyside, Mashburn said.
Water rates would need to be fixed over a period of time instead of immediately raising the rates to the level they should be, Mashburn said. He feels that raising the base rate for water may be the toughest part to deal with for the residents in the city.
"The city should be as proactive as they can now instead of waiting for a problem to arise before making changes to the rates," he said.
While rates for water may need to be raised, LaFontaine said he doesn't want residents to worry about their water bills rising next month. He said it will take time for the changes to be implemented and the public will be informed throughout the process.
"This needs to be corrected," LaFontaine said. "We don't want to do anything extreme, so we'll have to take baby steps going forward.
"If the state makes the choices for us, it will be a lot harder on us," he said.