Monroes last rate increase was 3%
On March 31, 2008, the City of Monroe Board of Public Works unanimously recommended to Common Council to approve a possible simplified rate increase for water, to be submitted to the Public Service Commission (PSC). On April 2, 2008, council approved that increase.
Residential consumers were to see an $8 average increase in their yearly water bills. The increase began with the June 1, 2008, quarterly billing cycle.
Prior to 2008, Monroe's last water rate increase was in 2004, when the rate of return had dropped. Rate of return is the operating income for construction projects.
At that time, the increase was 8 percent which added about $4 per quarter, per household.
According to Water Department Supervisor Mike Kennison, the PSC authorizes a 6.5 percent rate of return, but Monroe then stood at 1.3 percent.
The PSC insists the rate of return be kept up, "so as not to hit (consumers) all at once" Kennison said.
The city had to go through the process of a "simplified rate increase" of 3 percent first, before applying for the full rate of return in 2009. The PSC had to approve the simplified rate increase, and could have allowed less than 3 percent.
Kennison said the 3 percent would produce an income of about $12,000 to $15,000 for the city.
- Tere Dunlap
The rate application's impact on water customers is difficult to determine due to the number of customer classes and charges on utility bills, Utility Supervisor Michael Kennison said Monday.
"I really have no idea at this point what it will mean for residential customers," he said.
The 35 percent number is an average, including industrial, public authority, commercial and residential rates, he said.
Currently, residential customers pay $1.29 per 100 cubic feet for the first 6,000 cubic feet of water used in the quarterly billing period. However, Kennison does not believe residential rates would reach the 35 percent mark.
According to the rate application, the utility would have an estimated $65,430 loss in net income for 2010, a figure the PSC staff reduced to $8,029 after reviewing the application last month. Kennison could not verify those numbers when interviewed Monday night.
While the utility's revenue has increased from $1.3 million in 2006 to an estimated $1.33 million in 2010, operating expenses and depreciation have risen to an estimated $1.39 million in 2010.
Major capital projects for 2010 include reconstruction of 8th and 9th streets, where water mains and sanitary sewer lines - some of the oldest in the city - will be replaced. Kennison also included a repair of well No. 3, on 5th Avenue, as a major project.
The utility also needs more revenue to cover expenses, which have increased in recent years. The cost of employee health insurance and contributions to employee retirement have increased in the past five years, as have electricity, vehicle fuel, natural gas, and chemicals including, chorine and fluoride, according to the application. The utility also pays over $200,000 in city property tax.
The utility reported that disconnection notices have increased as have uncollectible accounts due to bankruptcies.
The utility is seeking new rates that would boost revenue by $382,246 to $1.73 million with a net operating income of $374,217. That would leave the utility with a 6.5 percent return on its infrastructure investment, which is the amount the PSC approved.
The PSC approved utility's last rate increase in June 2008, said Jamie Gould, accounting manager.
Kennison said that rate increase was a simplified "cost of living" increase.
No date has been set for a public hearing on the rate request, but Gould anticipated it could be held in February. The PSC would then act on the request.