In a social media post, Aryeh White, Mt. Zion PSD Board President, gave a very clear explanation of the recent proposal made by Mayor Robert Petrovsky.
There’s a lot of questions about the water rate increases that the Town of Grantsville is preparing. I’m going to explain as well as I can what’s happening and what it will mean to customers of the Mount Zion PSD.
The town is preparing an 87% increase on both domestic and bulk water rates. Domestic customers of the town currently pay $18.18 per thousand gallons. Both the Pleasant Hill and Mount Zion PSDs pay a bulk rate of $5.54 per thousand gallons. (I am going by memory and might be off by a few cents in these rates.) The proposed increase would bring the bulk rate for the PSDs to $10.04 per thousand gallons.
This does not mean that Mount Zion PSD customers will see an 87% increase on their bills!
Most of the costs in operating a water system come from maintaining the infrastructure for distribution of water. The actual cost of water currently only represents about an eighth of the bill paid by Mount Zion PSD customers. Far, far more goes into getting the water to your home or business.
If the rate increase goes forward as proposed, an 87% increase on that eighth of the bill would represent only a 10% increase on our customers’ bills. Similarly, Pleasant Hill’s customers would see an increase of around 12-13%
Only domestic customers served directly by the Town of Grantsville would see an 87% increase on their bill with the proposed rate increase. While this is a large increase, the new rates for Town customers would be very nearly the same as Pleasant Hill PSD’s rates, which are some of the lowest in the region.
Why is the Town doing this? Simply put, they have no choice. There hasn’t been a proper assessment of the costs of their water operations in decades. The recent small increase was to account for a bond for plant updates, not to account for operating costs. Inflation exacerbated an existing issue and the Town has been forced to subsidize their water production from the general fund. Rates should never have been allowed to become this disconnected from actual costs.
The unquestionable necessity of an increase aside, there is room to question the details of the increase. The factors that have made maintenance of distribution infrastructure more expensive are not the same factors that have made water production more expensive. Increasing domestic and bulk rates by the same percentage might not properly reflect where costs are ballooning. There is also the sticker shock of correcting a decades-old price all in one increase.
Mount Zion PSD is investigating our options to respond to the proposed rate increase and we are exploring all options available to us. In the long run, an unprofitable town water plant is no good to the Town, the PSDs, or domestic customers. At the same time, Mount Zion PSD must work in the best interests of our customers, and that includes securing water for them at the best possible rate.
If you have any questions, please feel free to ask.
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