Winchester alters water rate structure
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By Carmen Ensinger
To say that Winchester is raising the water rates for all their customers would be a misnomer. The change in the rate structure at the city council meeting on Oct. 6 agreed to reduce the water bill for customers who use only the minimum amount.
The council began talks about raising the water rates at last month’s meeting when they learned that they were losing money. Alderman Lawrence Coultas was tasked with coming up with a solution that would raise revenue for the city and still be fair for the city’s water consumers.
Last month, the city discussed two different scenarios. The first scenario was a 50 cent increase for the first 1,000 gallons from $14.30 to $14.80. From there, the increase would be from $1.15 to $1.33 per 100 gallons for the next 3,000 gallons. After that, the next 3,000 gallons would see the rate rise from 87 cents to $1.18 and over 7,000 gallons would go from 74 cents to $1.03.
Coultas explained how he came up with an estimate of how much revenue the city would see from this change in rate.
“To try to get a handle on what kind of revenue that this would generate, I selected 140 residents and figured out from there how many gallons were used and what that cost would be and multipled by five because we have 700 plus water residents,” Coultas said. “I only included residents – I didn’t include any businesses, the school or nursing home in these calculations – this is just based on residents so it is just a rough estimate.”
Using these numbers, the estimated revenue this increase would generate would be approximately $3,245.65 per month or $38,947.80 per year.
The second option that Coultas explored was a bit simpler. It reduced the base rate for the first 1,000 gallons from $14.30 to $14.00, thereby actually reducing the water rate for those water customers who do not use much water, such as the elderly.
From there, instead of a graduated decrease in the rate for the amount of water used after the first 1,000 gallons, there would be a standard rate of $1.40 per 100 gallons used. This option would realize an additional $50,000 a year for the city.
Winchester Mayor Rex McIntire preferred this option, not only for the additional revenue, but for other reasons as well.
“I like this option because we can tell people we are going to reduce the basic water rate for our low-end users and there might be some good public relations in that,” he said. “Most of those users are our elderly, so their water rates would probably be reduced.”
Another reason why he preferred it was the simple reasoning that the cost of producing water doesn’t change with the more you produce.
“The cost of water doesn’t change whether you produce 100 gallons or 1,000 gallons,” McIntire said. “So, why should the pricing be different. Water costs us the same to make it.”
A comparison of current rates and proposed rates are as follows on this second flat-rate increase option. For a 2,000 gallon a month user will see an increase of $2.20 a month. A 3,000 gallon a month user $4.70; 4,000 gallons, $7.20; 5,000, $12,20; 6,000, $17.80; 7,000, $23,10 and 8,000 gallons, $29.70. For the user that uses the minimum of 1,000 gallons, their bill will decrease by 30 cents to $14.00.
McIntire said that any government agency, such as the school, the city would be more than willing to try to work with them.
The increase would not go into effect until Jan. 1 and would not be seen by customers until their February bill. Rural water customers would not be affected by the increase.
The city has not increased its water rates since 2015 when it installed its new water tower. While the city’s water fund isn’t completely broke, it is seeing its reserves being depleted at an alarming rate due to repairs having to be made to the city’s infrastructure.
“We had to spend $99,000 on repairs on the wells this year,” McIntire said. “Our amount of excess revenue this year was not that much and our cushion in our water account is going down and we are going to have to start putting in some new mains, which is going to cost us a lot of money.”
The city is also in the process of purchasing a new automated system for reading the water and gas meters (see other story).
