Facing aging infrastructure and ever-rising costs, City Council members voted to raise utility rates for Boulder City residents.
The 4-1 vote, with Councilman Cam Walker objecting, came during a budget workshop May 12 and will be finalized with formal resolutions during the council’s May 24 meeting when it will approve its final version of the budget for the 2017 fiscal year.
“This will set us on the right path to get the utility situation fixed so we can maintain it,” Mayor Rod Woodbury said.
The raises agreed upon by the council will take place during the next four years, with water and sewer rates seeing the biggest hikes.
The plan approved has a one-time water rate increase of 54 percent. Shirley Hughes, the city’s finance director, said that “while that sounds horrible, it’s still extremely low.”
The lowest tier water rate will rise from $1.49 per 1,000 gallons to $2.29.
Sewer rates will see a 17 percent spike per year from 2017 to 2020, and electric rates are set to increase 16 percent in 2017, and 5 percent in 2018, 2019 2020.
Hughes said despite the increases, Boulder City’s residential electric rates will still be 17 percent below NV Energy’s rates.
After the initial adjustments, utility rates across the board are expected to be increased 2½ percent annually to account for inflation and other expenses.
Walker based his objections on the financial burden the increases will place on Boulder City residents, raising the lowest tier cost per gallon for water use to the highest rate in the area.
He also said there is enough money in the city’s utility fund to begin implementing capital improvement plans immediately.
He also suggested the city consider obtain a line of credit and borrow against that, especially for larger projects that need to be completed sooner rather than later, and asking voters to approve the new debt.
“I would feel better if we raise the rates,” Woodbury said. “We will have to raise them anyway to pay off the debt. “I’m not adverse to bonds,” he added, saying “If we were healthier, they would already be part of our portfolio.”
After a great deal of debate during the three-hour session, Woodbury said if rates are not raised and the council waits to see what money could be raised through land sales or issuing bonds, it will be holding the future of the city hostage.
He also objected to waiting to take action until next year for additional studies, stating they can’t keep punting decisions to the next council.
Though as a city resident Woodbury said he was not happy with having to raise rates, “I think it’s the right thing to do.”
Councilman Rich Shuman agreed that raising the rates was necessary and wanted to minimize the impact on ratepayers. He also wanted to ensure most critical needs were addressed first and made a motion to begin implementing two electrical improvement projects, including replacing a major transmission loop, during the 2017 fiscal year.
The new rates will take effect in October, when utility costs are traditionally lower so the financial impact on residents will not be as great.
Additionally, Councilman Duncan McCoy asked city staff to prepare a report comparing the new rates to those of surrounding utilities.
Hughes said the comparisons are something the staff planned to look and they are always reviewing utility rates.
Councilwoman Peggy Leavitt was out of town and joined the workshop via telephone.
The council also directed staff to look at the disparity between commercial and residential rates for future consideration.
Hali Bernstein Saylor is editor of the Boulder City Review. She can be reached at hsaylor@bouldercityreview.com or at 702-586-9523. Follow @HalisComment on Twitter.