Mayfield considers water-rate increase as study identifies revenue shortfall
MAYFIELD—Mayfield residents could face higher culinary water bills as town officials consider how to cover operating expenses and build reserves for repairs and improvements to the town's water system.
The Mayfield Town Council reviewed a water-rate study during its Oct. 7 work meeting and continued the discussion Oct. 14, with members expressing support for increasing rates but differing on whether to adopt one larger adjustment or smaller annual increases.
The council expects to consider a proposed ordinance and hold a public hearing in November after obtaining additional financial projections.
Study identifies funding gap
Janelle Braithwaite of the Rural Water Association of Utah presented the rate analysis Oct. 7. The study used the town's water budget and 12 months of customer usage to estimate the revenue needed to operate and maintain the system while beginning to build reserves.
According to the analysis, Mayfield generates approximately $149,000 annually in water-sales revenue. But it needs an estimated $173,000 to break even.
Braithwaite presented a rate scenario projected to generate approximately $197,000 annually, assuming customer consumption remains constant. That amount would cover projected expenses and support an initial savings goal of 10 percent.
The proposed savings would help the town prepare for unexpected expenses such as broken water lines, equipment replacement and future capital improvements without relying entirely on borrowing or outside funding.
"You’ve got to run this like a business," Braithwaite told the council.
She explained that although the town includes depreciation in its financial planning, it has not necessarily placed money into savings for replacement of aging infrastructure.
Besides helping the community maintain its water system over time, having reserves would improve the town’s position when seeking assistance for larger projects, she said.
What the increase could cost residents
Under the rate scenario Braithwaite presented Oct. 7, Mayfield's base charge for culinary water would increase from $30 to $41 per month.
The study also proposed increases in the town's graduated usage charges, under which rates rise as customers consume more water.
The first usage tier, covering up to 6,000 gallons monthly, would increase from $4 to $5 per 1,500 gallons. The next tier, covering usage from 6,001 to 12,000 gallons, would increase from $8 to $10 per 1,500 gallons.
The third tier would increase from $12 to $14, while the highest tier would rise from $14 to $18 per 1,500 gallons.
Based on study's calculations, the average monthly water bill would increase from $44.32 to $58.72, a difference of $14.40, or approximately 32.5 percent.
The analysis found approximately 78 percent of the town's customers averaged 6,000 gallons or less per month.
Mayfield also has special drought water rates. The town's published schedule lists a $40 base charge under drought conditions, compared with its regular $30 charge, along with higher usage charges. Those drought rates are currently in effect.
Because the study comparison uses the regular rate schedule, the projected $14.40 average increase does not necessarily reflect the increase residents would see from their current bills. The increase would depend on the final ordinance, water usage and whether drought charges apply.
Council members discussed the potential impact on residents with limited or fixed incomes. They also considered how to distribute the additional cost between the base charge and the higher usage tiers.
Council favors larger initial adjustment
During the follow-up meeting Oct. 14, Mayor Travis Good said he believed the town needed to increase rates but questioned whether Braithwaite's proposal would provide enough financial protection.
"The question I have for you is, is it enough?" Good asked.
He questioned whether the town should adopt a larger increase immediately rather than return to residents for additional adjustments in the following years.
Braithwaite had recommended a substantial initial adjustment followed by smaller annual increases of approximately 3 percent over five years, intended to help the water system keep pace with rising operating costs.
Several council members expressed reservations about adopting automatic annual increases, preferring to make a larger adjustment and review rates again after several years.
Good suggested considering a 26 percent increase as an alternative to recurring adjustments, potentially allowing the town to avoid another increase for approximately three years.
That figure remained preliminary. The council did not establish a final rate schedule corresponding to the percentage, and it should not be confused with the consultant's original model, which called for a 32.5 percent increase.
Financial concerns date back to spring
The proposed increases follow several months of discussion about the town's utility finances.
During a May 5 work meeting, officials reviewed a draft budget that projected a deficit of approximately $40,051 in the public utility fund.
The town also continues to explore water-system improvements, including a proposed aquifer-recharge project. At its Oct. 14 meeting, the council supported pursuing a Community Development Block Grant application for the project, which officials hope could improve groundwater conditions and potentially reduce reliance on water treatment.