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In an effort to help maintain area industry, the Winchester Municipal Utilities Board of Commissioners has approved a measure that could lower the water rate for large quantity users.
At the regular commission meeting last week, WMU Vice Chairman Paul¿Rodgers presented an alternative to the planned rate increase set to take affect in 2013.
The original rate change, set in 2010, would have given WMU three tiers of rates instead of four. Customers using up to 17,000 cubic feet and those using up to 350,000 cubic feet would merge into one tier. The customers using up to 350,000 cubic feet would have seen their rate nearly double, from $2.77 per 100 cubic feet to $4.33 per 100 cubic feet in the city and 3.63 to 5.64 in the county.
The rate was based on the capital needs of the time. WMU had just entered into the consent decree with environmental regulators and needed a new water plant along with other capital projects. Some fortunate factors, though, have made the higher rate a little less necessary.
“Some of these projects we had, we didn’t have construction bids on them, we had preliminary numbers,” WMU General Manager Mike Flynn said. “Those numbers were forecasted numbers. They were engineering estimates.”
Once those bids came, the costs were less than expected. WMU also received grants and low-interest loans that helped keep the costs lower, Flynn said.
“The rates were adopted based on proposed needs,” Flynn said said. “We didn’t have the final dollar amount. We need to have a rate that is reflective of the cost that was associated with constructing those projects.”
Rodgers proposed maintaining the four-tier system and changing the rate for customers using up to 350,000 cubic feet. Rodgers’ plan would increase the rate for those customers to $3.55 in 2013 and $3.75 in 2014. The rate for county users would rise to $4.64 in 2013 and $4.97 in 2014.
His presentation argued that these rates would keep Winchester competitive in recruiting new industry and help retain the industry it already has. Rodgers compared the current rate among the 17 other Bluegrass area cities with populations greater than 2,500. While the current rate has Winchester in the middle of the pack or a little lower, the original rate change for 2013 would move Winchester near the higher end of rates in those cities.
“With the rate increase in 2013, we would have jumped to the top in the Bluegrass. That is a huge disparity,” Flynn said. “We saw that as a problem. We didn’t want to be in that category. That’s what started us to look at it.”
The lower rate would cost WMU about $240,000 a year and would push back the start of any new capital projects by at least a year, unless WMU can find more grant money or low-interest loans to get things back on track.
While the commission approved the measure, the issue will need to be brought to the attention of the Winchester Board of Commissioners, which will need to draw up an ordinance and have a first and second reading before the end of the year.
For WMU, it was more important to retain industry than to begin the new capital projects.
“Industry in this community means jobs and residents,” Flynn said. “We want to make sure we retain the current industry and recruit future industry.”
Contact Casey Castle at ccastle@winchestersun.com.