- Nephi's culinary water and sewer rates will be raised to $10.50 per month customer charge
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By Myrna Trauntvein
Times-News Correspondent
An adjustment to the way culinary water and sewer rates are paid for by Nephi City customers was adopted by council members on Tuesday.
The change will be reflected on the September bill.
In the past, a minimum charge of $7.50 per customer was used for residential culinary water consumers. That rate also covered the first 5,000 gallons used per household. That is no longer the case.
Residential water service customers will now pay a $7.50 per month "customer charge" rather than a "minimum charge" and will also pay 60-cents per thousand gallons.
"The 5,000 gallons, which once came with a minimum charge, will now cost the customer $3," said Mark Jones, mayor.
Therefore, the bill for a customer using 5,000 gallons a month would, rather than $7.50 per month, be $10.50 per month for a customer paying the customer rate plus the 60-cents per 1,000 gallons if 5,000 gallons were used.
One council member, Robert Painter, voted against the rate change being introduced at this time stating that, since the city was formulating a water master plan that should be completed this year, he thought the city should wait to adopt the rate change until that study was completed.
"I voted against the change because I wanted to wait for the master plan to be done to give us more direction," said Painter.
The culinary water master plan is expected to be done by late in 2010 or early in 2011.
Adopting the new wording of "customer charge" over "minimum charge" indicated the need for customers to accept the idea that they, as consumers, would be helping pay for maintenance and up-dating of the public utility.
"This is the first step in getting the necessary structure in place to provide for the future of the system," said Greg Rowley, council member.
"The present water rates were adopted in 1986," said Randy McKnight, city administrator, "and have remained almost entirely unchanged since that time."
However, in the 34 years the rates have been in force, costs to operate the system have steadily increased. In addition, he said, construction of needed system improvements has depleted reserves in the water and sewer fund.
"The water system is aging and is in need of several significant upgrades and replacements," said McKnight. "Recent experience has shown that lines and storage tanks installed decades ago are not adequate to meet the needs of larger and more wide-spread neighborhoods, businesses and public facilities."
Along with needed up-grades, additional water sources will also need to be developed to meet future demands.
One challenge to rate structures is that all customers be treated equitably.
The rates which charge customers on the basis of the amount of water they consumer are the best at assuring all are treated fairly. Customers, therefore, should be charged according to the strain they impose on the water utility supply.
Commercial water service customers will pay a $10.50 per month for the utility customer charge and will pay 60-cents per thousand gallons in addition. Industrial water service customers will pay a $10.50 per month customer charge.
"This rate is available to customers using more than 2 million gallons of culinary water per month," said McKnight.
In addition to the customer rate, industrial users are of culinary water are charged 35-cents per thousand gallons up to 5 million gallons per month and 45-cents per thousand gallons above 5 million gallons per month.
"There is no proposed change in the sewer rate charge until the master plan is done," said McKnight.
Residential sewer service customers will continue to pay a $7.25 per month flat rate and commercial sewer service users will still pay an $8.25 per month customer charge and 40-cents per thousand gallons of metered water usage.
"The theory is that everyone needs to pay for maintenance of the culinary water system, whether they are a high or low volume user," said McKnight.
A rate structure should also be designed to ensure that the utility recovers its costs. The minor adjustment adopted by the council will help pay for on-going operations and repairs.
"Once the master plan is completed, additional rate changes can be considered to meet the priority needs of a safe, reliable and high-quality drinking water system," said McKnight.
The water system master plan, currently being formulated, will identify, prioritize and estimate the cost of future system improvements to meet the needs of current and future water users. Perhaps the costs of these future improvements will require subsequent adjustments to rates.
"The adopted rate is still one of the lowest in the state," said McKnight.
Throughout the state, most water rate structures are made up of two charges. One is the service "customer" charge, or the fixed service fee per billing period, regardless of consumption level and the second is the consumption charge which is the price for each unit of water consumed.
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