Water rates may increase, slower than expected | TheUnion.com

Water rates may increase, slower than expected

Even though Nevada City residents and businesses could see water rate increases on a longer timetable than previously established in 2010, the overall incremental hikes could stay below what the Nevada City Council originally approved.

At the beginning of January, residential rates jumped to $55 per month for a 1-inch meter. If the Nevada City Council chooses to adopt a proposed amended water rate schedule at its meeting today, that adjustment would translate to $56 per month in fiscal year 2014-15 instead of the previously approved $63.48 rate, according to a city staff report prepared for the meeting.

Commercial rates would see similar adjustments.

The city’s water rate increases were originally implemented to offset a more than $765,000 water fund deficit and based on projects that assumed water use would decrease as costs increased.

That hasn’t happened, noted the city’s finance director Catrina Olson, despite efforts to encourage conservation.

Last year, the city’s water fee revenue was more than $70,000 above what was projected, leading to rates increasing 6.5 percent instead of 16 percent as planned. However, the city’s water fund isn’t flush with cash, certainly not enough to drown its current $565,000 negative water fund balance, Olson noted.

In conjunction with lower operating expenses — notably the $3 million drop in treatment plant costs — the city’s water revenues were approximately $160,000 over expenses in 2012, Olson said.

With many of its pipes decades past needing replacing, that overflowed revenue is being piped into a reserve fund.

Additionally, the city’s deficient water fund has been kept afloat by the city’s sewer fund, which also is scheduled to be paid back as the reserves are built.

At the pace of the proposed rate amendments, the city’s water fund will be brought to a healthy position by fiscal year 2019-20, according to the city staff report proposal to be considered by the council today.

Pioneer Park funds

In other financial news, allocation of funds for the planned renovation of Pioneer Park’s oft-soggy field are also up for council consideration.

Funding for the project is not expected to be approved by the county, noted parks director Dawn Zydonis in her reported prepared in conjunction with City Engineer Bill Falconi. The report indicated the county was not convinced the project — the first phase of which is expected to cost almost $50,000 — would improve the field’s condition.

Instead, the parks department is requesting that funds that have already been collected instead be allocated to the project.

Nevada City Council is scheduled to meet at 6:30 p.m. today at city hall, located at 317 Broad St.

To contact Staff Writer Christopher Rosacker, e-mail crosacker@theunion.com or call 530-477-4236.

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