RWRA Plans 22 Percent Rate Hike
Posted on: Wednesday, 19 October 2005, 12:00 CDT
By Ryan Garrett, Messenger-Inquirer, Owensboro, Ky.
Oct. 18--The Regional Water Resource Agency board gave its preliminary approval Monday for a rate hike that would increase the average residential bill 22 percent by July 2007 as well as increase the minimum monthly bill.
Under the multiphase plan, the rate per thousand gallons would go from $2.77 to $3.04, an increase of 27 cents, in January. In July, there would be a 28-cent increase to $3.32. The final increase would come in July 2007, when the rate would become $3.57, a 25-cent increase.
The average monthly bill would progress from the current $13.33 to $14.36 in January, to $15.40 in July and finally to $16.26 in July 2007, assuming a projected continued decline in usage.
The minimum monthly bill would charge for 3,000 gallons rather than the current 2,250 gallons. That would make the minimum bill $10.71 in July 2007, compared to $6.23 today.
"No one likes increases," board Chairman George Stuart said before the vote. "I don't like it. ... I wanted to hold off on it as long as we could to make sure we had done everything we could to cut expenses where we could without cutting service."
The board needs to balance its obligation to ratepayers while ensuring that the sewer system is properly maintained, Stuart said.
"I, for one, think the timing is right," he said.
The planned increase is the result of a comprehensive rate analysis by Lexington-based Quest Engineers. The study showed that usage has steadily declined for the agency for many years while the cost of doing business and maintaining an aging sewer system has constantly increased.
RWRA has seen an average 1.8 percent drop in usage each of the past 13 years.
The rate increases should keep the RWRA in the black for the next five years according to Quest projections.
The final average bill of $16.26 is only a few cents higher than the $15.98 recommended for 1995 in a rate study earlier that decade, Quest senior project manager John LaRue pointed out.
The rate that would have created that bill was never implemented, but a study in 1998 led to a two-step increase that brought about the current rate of $2.77 per thousand gallons in July 2001. At the time, that rate was expected to establish an average bill of $14.09, but declining usage has brought that down to $13.33 today.
Even after the increases, RWRA bills still will be less than those in most of Kentucky's second-class cities.
After Henderson's new rate structure is in effect, the only cities with cheaper service will be Paducah and Ashland, according to Quest. But Paducah is working on an increase, LaRue said.
The average residential bill in second-class cities, excluding Henderson and RWRA, is $22.94. The highest is Frankfort's $29.35. The lowest is Henderson's current $10.92.
The comparison "shows us there is a measure of equity and affordability" in the increases here, LaRue said.
Stuart, John Stevenson, Tom Dixon and Harry Roberts Jr. voted in favor of the increases.
Vice Chairman Roger Anderson had the lone vote against the increases, saying he did not have enough time to study the proposal. Board members received the proposal last week.
Board members Ozzie Maglinger and Imelda Madison were absent.
With the vote Monday, the agency will now publish the plan to begin a 30-day public comment period. The board is expected to vote again in November before forwarding the plan to the Rate Review Board, which is comprised of members of Daviess Fiscal Court and Owensboro City Commission.
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Source: Messenger-Inquirer
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