Written by Jenney Rees
Recently we’ve had some residents ask why their water and sewer bill is higher than other cities and higher than they were ten years ago. There are a few reasons for this:
1. There was a large spike in residential building, especially from 2002 to 2007. This resulted in a need for increased infrastructure, including the pressurized irrigation (PI) system, the Public Works building, and an additional water well. Because of the expenses associated with these larger infrastructure projects, the city needed to bond for them. The bond payments for the PI system and the water well come out of the water, sewer, and storm drain fund, so this has an impact on utility rates. Some of the infrastructure that was needed when the city expanded (such as streets, sidewalks, etc.) was not bonded for, but the PI and water well did require a bond. The infrastructure items we bonded for are also bonded for by other cities as they grow.
2. Going back to the growth, Cedar Hills is relatively young (most of the growth occurring in the last 10 years), where older, nearby cities built most of their infrastructure many years ago and have had those years to pay off their infrastructure debt.
3. The EPA created laws with regards to storm water and required cities to comply. These laws were created to reduce pollutants from entering streams and rivers. You can find more information at http://www.epa.gov/npdes/pubs/fact2-0.pdf. These laws are enforced in Utah by the Department of Environmental Quality. These laws were phased in over the past decade but really hit us financially beginning in 2011. Reviewing the budget on page seven, it shows the expenses associated with these storm drain requirements. The expenses went up from $79,657 in 2010 to $404,362 expected for 2014.
4. In 2012 the city hired Bowen, Collins & Associates (BC&A) to do a utility rate study to determine what our operations and infrastructure needs would be over the next 10 years and how to appropriately budget for these items. BC&A looked at the costs for operations and maintenance, the bond payments, and the improvements that would be needed in order to keep the water, sewer, and storm drain systems functioning as they should. After doing an in depth review of each utility service and determining future needs, BC&A suggested a rate increase for each year over the next ten years. The rate increases will be for culinary water, sewer, and storm drain. There is no increase proposed for the PI system. The overall utility increase for each year ranges from 3.7% to 4.3%, which is just above normal inflation rates. Doing a small increase each year instead of dramatically raising property taxes when major repairs are needed is preferred in order to minimize the hardship on residents. The entire analysis may be found online at https://www.cedarhills.org/sites/default/files/utility-rate-study-2012.pdf or you can view an in depth summary in our State of the City Report from last year, found on pages 11-16 at https://www.cedarhills.org/sites/default/files/state-of-the-city-report-2012-09-18.pdf.
5. It is hard to compare a city like Cedar Hills to larger cities, as some have more sources of tax revenue than we do. For example, many of these cities have larger commercial areas, which bring in much more sales tax revenue than ours do. Our goal is to get our commercial zone developed as soon as we can in order to reduce tax burdens on our residents.
Hopefully, this explanation answers these questions. Any resident with additional questions is encouraged to contact the city’s Finance Department or any member of the City Council.