Helper officials discuss city water system, table rate hike resolution
Helper residents have yet to learn whether the city council will raise water rates.
The matter was set for a vote last Thursday. But the issue was tabled after councilmembers and residents raised a variety of concerns with the city's present structure.
The resolution, as presented by the council, included increases in electrical and water rates. If passed, the resolution would have set rates for sewer services as well.
However, Mayor Mike Dalpiaz pointed out at the May 18 council meeting that the advertisement regarding the resolution and the agenda item only included the water rates. The mayor said electrical, sewer and other rates would remain the same and would not be adjusted unless properly advertised.
Councilmember John Jones addressed the need for Helper's water rates to be increased.
"I don't believe our water system has been maintained properly over the last 14 of 15 years," said Jones.
The councilmember pointed to one water tank that is beginning to rust and a second tank that is likely to begin rusting soon.
Both tanks need to be painted and need repairs to cathodic protection devices. Jones said that if the tanks fail entirely and need to be replace, the city would be looking at a repair cost of about $1 million each.
Jomes said the tanks are just the beginning and the water system throughout the whole town needs immediate attention.
"We're on a crash course in this town," noted Jones.
The councilmember said the current budget process for infrastructure was illustrated a few years ago when one of the main waterlines for the city failed.
"We run and beg for money," explained Jones.
The councilmember said the city could have a reserve set up so that,when unexpected failures happen, there is a fund to cover the cost of repairs. In the case of smaller repairs, the city has made a practice of patching and fixing problems just enough to get by, comparing it to putting a bandage on the system.
"I am against the band-aid process," indicated Jones.
The councilmember said passing the problems along to future generations is irresponsible and the city's leaders need to work to take care of the situation now.
If Jones' proposal were to pass, each water user would pay $21.50 and receive 8,000 gallons with the initial bill.
The users would then pay $3 for every thousand gallons of water used beyond that to 100, 000 gallons. Above 100,000 gallons, water users would pay $4 for every thousand gallons.
Jones said that the figures were set up so that the city would generate $264,000 from the base rate. He said that by looking at a sample of last year's monthly readings, he figured the new rate structure would generate anywhere from $30,000 to $40,000 per year in additional revenue.
That money would serve to make improvements that have been put off and to plan for upgrades down the road.
However, Jones' proposed increases met opposition from the mayor and city residents. The mayor pointed out that the city has approximately 200 million gallons of water available at its springs each year. However, the city only sells 72 million gallons to its water users. Though the city uses additional water beyond the amount sold to residents and businesses, the city has somewhere in the neighborhood of 100 million gallons of water that it could be selling but isn't.
Various residents supported the idea that the city look into selling the surplus water to other cities in the county.
The mayor explained that there is no simple way to sell the surplus water right now. However, if other municipalities are agreeable, Helper could make connections to the Price city water system or the Price River Water improvement District system and sell their surplus water to those entities.
He pointed out that Wellington has no water delivery infrastructure and is entirely dependent on PRWID. He said that Wellington Mayor Karl Houskeeper and he had addressed the idea of helper selling some of its surplus to Wellington.
However, whatever discussions may be underway, Helper will not be selling its surplus water any time soon. At present, there is no method to deliver water from the Helper to any of the other cities. Still, residents at the meeting urged the council to look at the idea as a possible revenue source that could ease the burden on city residents.
Another factor to consider regarding the new rate structure is how it impacts different users.
Councilmember Dean Armstrong cited a report that suggested that the most equitable way to bill users for water is a block structure, where water users who use more are charged more.
Such a rate structure already exists in Helper, where users who consume more than 10,000 gallons in a month are billed $2 for every thousand gallons above 10,000, a 50 cent increase over the price for water below 10,000 gallons. Additional increases occur at the 15,000 gallon and 20,000 gallon marks.
Jones' proposed structure eliminates those increases so that water users who use 10,000 gallons pay the same price for every thousand gallons as those who use 50,000 gallons.
For users who use more than the 8,000 gallons, the cost per gallon is roughly the same. A user who consumes 8,000 pays the base rate of $21.50, or $2.69 for every thousand gallons. A user who consumes 50,000 pays $147.50, or $2.95 for every thousand gallons.
However, what residents at the meeting last week saw was an unjustified increase to those who used the smallest amounts of water.
A Helper water consumer who uses 1,000 gallons would see a 59 percent increase; for 2,000 gallons, a 43 percent increase; for 3,000 gallons, a 30 percent increase; for 4,000 gallons, a 19 percent increase; and for 5,000 gallons, a 10 percent increase.
Some water users would actually see a decrease. Users who consume 7,000 gallons would see a four percent decrease in their rates; for 8,000 gallons, a 10 percent decrease; and for 9,000 gallons, a four percent decrease.
Other users consuming less than 100,000 gallons would see an average increase of 10 percent. The hardest hit would be those consuming between 17,000 and 20,000 gallons, where monthly water costs would increase 16 percent. As consumers consume more, the rate increase goes down. At 45,000 gallons, water users would see a six percent decrease. At 80,000 gallons, users would see a three percent increase.
The result is that water users who consume more would not be affected as dramatically as those who use less. For some, it seemed unfair since smaller water users are more likely to be single individuals living in apartments and on fixed incomes and larger users are more likely to be businesses who benefit from their increased water usage
However, Jones said that part of his reasoning for setting the rate structure was to encourage water consumption by the smallest water users. He said it was an effort to beautify Helper.
Given the public input, the council did not pass the resolution as it was presented. Instead, Councilmember Chuck Buchanan moved to table the resolution again, and have a work meeting to address the matter.
Buchanan said that he sees a need to increase rates. He said that in his term of service on the council, he has repeatedly been told that the city did not have the money to make improvements to its infrastructure. He said that he could see a need to change that mind set. He said the council had a responsibility to stabilize the finances of the city and to prepare for the future.
And while Buchanan said he initially came into the meeting ready to vote the resolution into effect, he wanted to see more work done to minimize the impact to smaller water users. He also agreed that the city should look into ways to capitalize on its surplus water supply. The matter is set for review again on June 1.
In an unrelated matter, residents will see the implementation of a $3 surcharge on their electrical bills. The increase was passed last fall and was never instituted. The council voted to implement the charge so that the city can begin to collect funds necessary to pay off the loan it received on the pool.
The council also voted in a 4-1 split to accept $300,000 in additional funding from the Utah Permanent Community Impact Board. The vote by the council extends the life of the loan from 25 to 30 years and increases the loan amount by $200,000. The city can collect up to $892,000 in the form of a zero percent interest loan and $400,000 in the form of a grant.
The council also approved the execution of the contract with the general contractor who will oversee construction of the pool. By doing so, the city will lock suppliers and subcontractors into rates already bid and avoid additional costs due to rising prices of materials and labor.