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City rates might rise more than normal to help cut into debt
Mar 22, 2013 - By Alejandra Silva, Staff Writer
Riverton residents may soon see a higher than usual increase in their utility bills. The rates for water, sewer and sanitation services automatically increase on an annual basis, and the time has come for the city to decide how much the percentage increase will be this year.
Some members of the city council have favored increasing the rates much higher for the purpose of reducing the city's debt.
The Riverton Municipal Code requires the city to examine and amend the rates according to the Consumer Price Index, which recently increased 1.6 percent. The CPI is the varying prices paid by typical consumers for goods and services, determined after the Bureau of Labor Statistics collects the data from all over the United States.
Fiscal responsibility is one of the city council's 2013 goals, and figuring out ways to reduce debt and being well informed before incurring more debt fall under that title.
Recommendations on the increases were presented to the mayor and city council at a March work session.
One choice was to continue with the automatic increase of 1.6 percent to each of the services. The city staff recommended a second option: increasing water by 4 percent and sewer and sanitation by 2 percent. A third alternative was a 5 percent water increase, sewer by 3 percent and sanitation by 2 percent.
Last year, water rates were increased by 7.6 percent, sewer by 3.2 percent and sanitation by 2.6 percent.
With the staff's recommendations, Riverton residents would see a $2.29 increase on their monthly utility bills, or $2.13 for households that recycle.
A few council members suggested the city go with the third choice, which would add about $3.14 to the resident's monthly utility bill. Public services director Bill Urbigkit said they made the point that this choice would "accelerate the reduction of that debt service."
Council member Richard Gard opted for the third choice but only if it truly would cut the city's debt sooner than the other choices.
"We can work our way to smaller increases," Gard said. "So we don't have to deal with this later. We need to maintain those funds."
The water fund holds a debt of more than $2 million, and the city's sewer fund, more than $700,000. With just a 1 percent rate increase, more than $25,000 would be generated to go toward the city's water debt and almost $20,000 for sewer.
"(Place) small incremental increases every year, keep up with costs, put aside money for the capital projects we need to do, (and) manage those funds wisely," Urbigkit said was the reasonable logic for managing the city's finances.
He added that in the past, a pattern of avoiding increases for a long period of time, increasing them substantially, and then avoiding them again was the protocol, but he said that the city doesn't do that anymore because it would do more harm than good for the city's debt and residents.
A public hearing regarding the utility rates is set to take place April 2 at the city's regular city council meeting. Also that day, the council and mayor may decide by resolution, which option to pursue.