Utility rate study recommends raising rates

March 24, 2010

An independent utility rate study released this month recommends the City of Belen raise its water and sewer utility rates because both services are running at a deficit.

“Under existing water and sewer rate structures and normal annual expenditures, the financial condition of both utilities is poor,” says the report, which was prepared by Trumm Engineering.

The report says some of the city’s water and sewer infrastructure is aging and in need of replacement.

“Revenues generated from existing water and sewer rates are not sufficient to adequately maintain existing facilities, or support any level of debt service to pay for needed improvements,” the report says.

The report also points out that grant funding for utility projects “has dwindled to a fraction of what was available in previous years.”

While the city can utilize grants and loans, the report suggests that’s not enough to meet the city’s water and sewer operation and infrastructure needs.

“Depending on decisions concerning water infrastructure improvements made by the governing body, the first step increase would range between approximately 14 and 49 percent. A four percent annual rate increase is recommended thereafter,” the report says of a water rate increase.

The report recommends a rate increase of 52 to 102 percent for sewer services, with a four percent annual increase after that.

The report hasn’t yet been distributed to the city council, and no talk of actual rate increases has occurred beyond what’s written in the report.

Posted in: Budget Infrastructure