Electric, water, sewer and trash rates are on the way up for City of Delta residents. In 2014, the typical residential customer will pay an additional $12.35 per month ($148.20 per year) for utilities.
The increases will cost the typical small commercial operation $16.20 per month and the typical large commercial operation $14.70 per month.
The rate increases were revealed during a 2014 budget work session conducted Tuesday, Aug. 20. Utilities director Steve Glammeyer went through each fund individually, beginning with a one-page overview that has been developed to standardize budget discussions for every city department. Those discussions will continue during work sessions in September, with the goal of presenting city council with a draft 2014 budget in October.
Glammeyer began discussion of the electric utility by reporting on the completion of the 115kv transmission line loop, which will help ensure uninterrupted service to city residents. Even in the wake of the widespread power outage which occurred in the summer of 2010, the city's reliability rate has exceeded the national average. On average, Glammeyer reported, the city's electric customers experience just five to eight minutes of outage time annually.
Purchased power accounts for 70 percent of department expenditures. MEAN, the city's power provider, implemented a 10 percent rate increase in 2013, and has warned of another 10 percent increase in April 2014. To cover increased costs, Glammeyer proposes an 8% residential rate increase and a 3% commercial/industrial rate increase.
Even with rate increases, revenues and expenditures are nearly balanced for the first time in Glammeyer's memory, there will be no transfers from the electric utility to either the general fund or the golf course. In 2013, those transfers were budgeted at $500,000 for the general fund and $385,000 for the golf course. A similar transfer in 2014 would essentially wipe out ML&P's $900,000 fund balance.
But because both the general fund and the golf course rely on those transfers, they'll have to be spread among the city's other enterprise funds — sewer, water and trash.
In addition, all four utility funds pay accounting/administration expenses and franchise fees to the general fund.
Councilmember Bill Raley pointed out the transfers have consumed the surplus in the municipal light and power fund, which was much healthier than the other three utilities. "How long is it going to be before those accounts are dried up too?" he asked.
"The point is well made," Glammeyer said. The revenue generated from the rate increases will not fully cover the transfers, so the fund balances in sewer, water and trash will begin to drop as ML&P has over the past several years.
That gives city staff and council members just a short time to come up with a long-term solution, whether that's locating additional sources of revenue, raising rates again, or cutting services.
City manager Justin Clifton said he's optimistic the transfers can be reduced "to a significant extent" in the coming years, but there's likely to be a trade-off. The recently completed city survey will be a valuable tool when it comes to establishing priorities, he added.
In earlier discussions about potential rate increases, Clifton emphasized city rates must still be competitive. Even though utilities are often considered a monopoly, Glammeyer's presentation illustrates that's not the case in Delta. ML&P, for example, serves just 45 percent of the city population; DMEA has the rest, although the city hopes to acquire DMEA customers as finances allow. About 70 percent of city residents are served by sewer; the rest have septic systems. City water is delivered to about 80 percent of city residents; the rest are customers of Tri County Water. And with trash service, there are even more options. About 65 percent of Delta's population has city trash pickup.blog comments powered by Disqus