Provo mayor proposes half-size water-rate increase after $94.5 million in outside funding

Mayor presented a compromise proposal on water rates and asked the Provo City Council to consider a 2.5% increase in water revenue rather than the 5% the council had been considering. The mayor said the highest-use customer group would see an average bill increase of 9.9% under the new proposal instead of about 18% under the earlier proposal and added that the city has secured $94,500,000 in outside funding for Provo water infrastructure.

The proposal is informed by a recently completed water master plan produced for the city by Bone Collins, a regional water-resource engineering firm. Gordon Hake, Provo’s public works director, told the council the master plan reviews sources, storage and distribution and recommends steps the city should take over the next 10 years while also projecting an 80-year infrastructure horizon.

Gordon Hake said the master plan recommended larger funding levels primarily because of “the massive amount of construction inflation observed over the last few years,” and not because of past negligence. “This large increase ... is a function of the massive amount of construction inflation observed over the last few years,” Hake said. He noted Provo currently spends about $6,000,000 a year on capital projects for water and that planned replacements are generally cheaper than emergency repairs.

The mayor summarized the city’s fiscal picture for the council: over a 10-year period the study calls for $65,000,000 in new revenue from rate increases, which together with $60,000,000 of baseline spending would produce about $125,000,000 available for water infrastructure if the study’s recommendations were followed exactly. The mayor said his administration’s review identified $1,100,000 a year in budget efficiencies the city can redirect to water without raising rates and emphasized that the administration had secured $94,500,000 in outside funding to support infrastructure work.

“Let me say that again. We secured 94,500,000.0 in outside funding for Provo Water infrastructure,” the mayor said. The mayor also urged a phased approach to implementing state-mandated tiered rates, saying the state’s requirement for tiered rates is intended for conservation and noting the importance of fairness for residents who previously installed large amounts of landscaping.

Hake highlighted several infrastructure details to support the argument for planned investment: the master plan does not recommend replacing every asset on an 80-year timeline, and some older assets remain in good condition. As an example, Hake described a 95-year-old water tank west of the Provo Rock Canyon Temple that staff inspected and found to be in excellent condition. He also reported the city averages about 33 leak repairs per year at roughly $15,000 per leak, an operational cost the city monitors.

The mayor framed the 2.5% proposal as a middle ground that phases in revenue while using outside funds and reserves to reduce the immediate burden on ratepayers. He said the administration will publish full details and a comparison calculator on provo.gov the next morning and will email the council the materials. The mayor also said the absent consultant can be scheduled for a future meeting if council members want to review technical details.

No formal council vote on rates was recorded in the presentation. The mayor closed by turning to the next budget presenter: “John Borge will now present his budget details in his letter.”