CITY PROPOSES INCREASED WATER RATES
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City Explains Water Rate Increase 3-6-09



The City of Salmon will hold a public hearing at the March 18, City Council meeting to address recommended fee increases. One of the city’s major considerations will be the need to increase water base-rates for services to residential users from $21 per month to $30 per month. Commercial properties will also need to participate in rate increases in a like manner based on the size of their water meter. Other fee increases and adjustments will be considered as well. Details of the proposal can be obtained at City Hall or reviewed in the legal notice section of the Recorder Herald.



Water base rates and use fees comprise the majority of the revenue for the City water fund. Tax dollars are not used to operate the water department. Costs of operating the water department include: daily operations, a reserve fund for replacing water filters ($50,000/year) and a $215,000 annual payment for the thirty year interest free $6,460,500 loan to construct the water plant. There is also a required matching reserve which equals the annual loan payment plus, repayment of a 1990 water fund loan ($75,000/year) and an operating reserve to cover equipment repairs and replacements. These expenditures and the commitments made to pay city debts and keep the water plant operational are real.



Water base rates were raised $6.00 per month two years ago. At that time it was determined the rates would need to be adjusted when the water plant loan was closed and the City’s loan payments and operational expenses were finalized. The water plant loan was finalized in October of 2008. After the city made its first payment this year, it became obvious that at the current base rates, the water fund would be in negative territory by September of 2010 which is why there is a need to change the rates now. City officials said it would be fiscally irresponsible to wait any longer.



Comments on all proposed fee increases can be submitted in writing or at the upcoming public meeting on March 18, 2009 at 6:00 PM in the City Hall meeting room.


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