Santaquin — City staff told the Santaquin City Council on Sept. 2 that a state law passed this year will create a new water-user fee for municipal drinking water and that the city is preparing a grant-funded update to the general plan’s water element.

The council heard that the new fee, enacted in Senate Bill 80 this year, will be assessed on culinary water usage and could have cost the city about $13,000 for calendar year 2024 if it had been in effect then. The staff estimate for the fee is roughly 3.1 to 3.3 cents per 1,000 gallons, to be applied to usage in 2026 and billed the following July.

The water fee matters because it will be charged to municipalities statewide and is intended to fund water projects, staff said. Norm, a city staff member, said the city is evaluating options for how to pay the charge and reported the council’s current stance: "We're opposed to it, but it is legislation, and it will be coming — the fee will be based on culinary water usage per calendar year paid the following July." He added that the city may pass the cost on to ratepayers or absorb it in the budget.

Separately, staff told the council the city will present a required "water element" to its general plan at an upcoming meeting. That update was funded by a grant and prepared with outside consultants Hansen Allen and Luce. The update is a state requirement, staff said, and will appear before the planning commission and then the council for consideration.

City staff recommended the council and administration evaluate options now — including whether to add the new state fee to customer rates — to avoid unplanned budget impacts when the first payment is due. No formal vote or rate change occurred at the Sept. 2 meeting; the matter remained a staff recommendation and topic for future agenda-setting.

Council members and staff also discussed the timing and accounting for the new charge: staff said the fee will be calculated per calendar year and the first payment citywide will be due in July 2027 for 2026 usage. The staff presentation did not include a final decision on how the city will fund the fee.

For more details, the state’s implementing division is accepting public comments on the program and the council was encouraged to follow posted rulemaking and guidance from the Utah Division of Drinking Water or the appropriate state office.

The council did not adopt an ordinance or rate change at the meeting; staff indicated they will return with options for council consideration.