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Front Page » December 9, 2004 » Local News » PRWID Considers Staff Proposal for Tax, Rate Increases
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PRWID Considers Staff Proposal for Tax, Rate Increases

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Sun Advocate reporter

Indicating that Price River Water Improvement District cannot absorb the inflationary costs of equipment, fuel, materials and system maintenance, the PRWID staff proposed property tax and sewer/water rate increases to the agency's board on Tuesday.

"We just don't have any money left for emergencies because we have depleted our reserves just trying to keep next years budget together," pointed out Phil Palmer, district manager at the regular board meeting.

The issue of increases has been under discussion since PRWID supervisors submitted proposed budgets to the administration almost two months ago. The board tentatively approved a balanced budget, but the administration has indicated that PRWID lacks funds to support operation of the district.

"We had to use the district's reserves to make that budget balance and that puts us in a very poor position," stated Palmer.

The district is financially supported by rates for sewer and water as well as the ability to collect property tax.

The staff said an increase in the two funding sources could bring the district back to a more viable financial state.

The proposed tax increase would be comparatively small, according to assistant PRWID manager Jeff Richens.

"The increase would be $16.59 a year on a home that has a property assessment of $150,000," stated Richens. "For a similarly valued business the increase would be $30.15 per month."

Richens said the total tax bill from the district for a $150,000 home evaluation would then be about $87 per year. The same home presently is being taxed by the district at slightly more than $70.

"That new assessment would result in a $165,143 increase in revenue for the district," said Richens. "However it could not be included on this years tax bill but would be put on the 2005 bill, next November. That means the district would get no money to utilize until 2006 if the change was enacted."

All the staff was asking the board for on Tuesday night was the right to advertise the tax increase in the Sun Advocate, and to then have a public hearing on the matter at the regular board meeting on Dec. 21. The board approved the go ahead to advertise the potential increase.

However, the proposed rate increase is a different matter. That money would be used to help with repayment of bonds as well as operation and maintenance costs.

"When we added the budget up originally we had a $180,000 shortfall so that is when we trimmed it back to balance it," explained Palmer. "With the bond payments we owe (which all come due for payment in April of each year to the tune of $940,000) we are supposed to keep a certain amount in reserve, but that reserve is in jeopardy now."

The staff proposed to increase in both sewer and water rates during the meeting. Those increases would include an increase in both retail and wholesale water costs.

The district presently sells retail water to residential and business customers within the unincorporated areas. They also sell water wholesale to entities such as Wellington and small water companies on a regular basis. Periodically they also sell water to Price and Helper. Helper has been buying water consistently in the last year because of a pipe failure in the line that brings water to Helper from a supply near Colton. That line has now been replaced.

The proposed increase for sewer rates would be one dollar on all users across the board per month. Richens said that kind of increase would bring in $97,452 annually.

The water rate increase would be somewhat more complicated. The staff is proposing that a $1 increase for each hookup in wholesale users areas be charged, and a $2 increase on all retail customers base be applied.

"That would add about 10 percent to each individual users base rate," said Richens. "We project that would bring in $58,848 annually."

At present PRWID provides water to 1925 water hookups in the unincorporated area. They also supply water to other entities, including Wellington which has about 671 hookups.

A number of the board members wondered when the last increases were put into affect by the district. The staff told them that the last increase in water rates was in 2001 when they went up 5 percent, but no one could remember the last time the sewer rates were increased.

The proposal for the increases came along with a review the board was doing on the 2005. What they have been looking for since the budget was finalized are areas where money could be pulled from in case of an emergency.

Board member Tom Matthews pointed out that he thought the district could probably save some money by not buying more water shares in the next year. In the budget there is $25,000 for doing just that.

"The thing that concerns us is when shares of water are decreased because smaller supplies are available," said Richens referring to the fact that it has been hard to get full delivery on any share of water in the last few years because of the drought. "Buying shares helps to guarantee we can get 100 percent of what we need even in years when there is only a 35 percent delivery.

Matthews then suggested that if things got that bad what would probably result would be condemnation of agricultural water for municipal and industrial use.

"The problem with that kind of situation would be that it would become a very ugly fight and we would rather not get into that if we don't have to," said Palmer.

The board said they would take the rate increase ideas under consideration. No action toward adopting such increases was made at the meeting.

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