By JAN LARSON McLAUGHLIN
BG Independent News
The City of Bowling Green sold more water last year than projected, but received less wastewater for treatment than planned. So the proposed rate adjustments for both services have been shifted since water revenue was up and wastewater revenue was down.
The city’s Board of Public Utilities voted last week to delay a proposed water rate increase and speed up a raise in wastewater rates. The result for most Bowling Green customers will be a wash this year, according to Public Utilities Director Brian O’Connell.
“I’ve never gone back and asked the board to adjust the rate schedule,” O’Connell said last week.
But after seeing higher than predicted revenue from water sales, O’Connell asked the board to delay the water rate adjustment that was originally planned for April 1 of this year to April 1, 2023. The proposed rate change will increase the cost of 500 cubic feet of water for residents from $12.21 to $12.80.
Some of the increased water sales are coming from the addition of Waterville to the city’s wholesale water contracts. Plus, “businesses and people are using more water,” O’Connell said.
“Those numbers don’t always happen as expected,” he said. “We really don’t need to just keep growing the capital balance.”
However, the opposite was seen in the wastewater revenue.
“The revenues are not keeping up with what we projected,” O’Connell said.
A possible reason for some of the decrease is more efficient systems and appliances that send less to the wastewater system.
So while the water rate adjustment will be delayed, the wastewater rates will be increased sooner than originally scheduled.
The wastewater rate adjustment planned for Jan. 1, 2023, will instead be implemented on July 1, 2022. And the next wastewater rate increase planned for Jan. 1, 2024, will be pushed up to Jan. 1, 2023.
The proposed wastewater rate will first change from $21.25 per 500 cubic feet to $21.50, then $21.75 a year later.
“The goal is to put the revenue toward the utility that needs it the most,” O’Connell said.
“We’ll continue to monitor the fund balances throughout the year,” he said. “If water sales are really good, maybe we can hold off for another year.”
The utilities department hires a rate consultant to perform a cost of service study which helps the city establish the rate schedules. The study projects future expenses and sales revenues based on the most recent financial information and sales history. It also accounts for any financial or sales changes that staff anticipates over the next few years.
The study attempts to balance the future expected expenses with the future expected sales revenue and adjust the rates accordingly. The study also helps the utilities department to allocate costs to each customer class (residential, commercial and industrial) so one customer class is not subsidizing the rates of another customer class.
