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Hurricane board weighs tiered rate changes, hardship aid as Dixie Springs needs $24 million
Summary
Board received staffanalysis of tiered water rates, discussed targeted increases on upper tiers, a proposed hardship program for low-income seniors and the $24 million estimate for replacing failing Dixie Springs infrastructure; staff directed to produce cost scenarios and multi-year maintenance plans.
Clark (water department staff) presented month-by-month spreadsheets showing revenue by rate tier and the effect of a hypothetical 10-cent increase on each step, telling the board that the modeled 10-cent increase would produce about $175,000 a year and that January's modeled increase would have been $8,632.10 based on that month's usage.
The board focused discussion on using tiered increases to promote conservation while protecting low-volume users. Clark said the district's current revenue is concentrated in the lower tiers: "The average for the year shows you just about 32% comes from the first step in our rates and only 6% in the final rate tier." He said the spreadsheet can be used to run "what-if" scenarios for different rate and tier-break combinations.
Several board members proposed safeguards for low-income or elderly residents. Board member Bevan suggested a hardship program for qualifying seniors; Bevan described a relative who lives on Social Security and urged a formal application-based hardship program, noting other utilities and property-tax exemptions use criteria to limit eligibility. Clark and other board members said a hardship program would likely require an ordinance or formal policy and staff administration (Angie was identified as the staff member who would likely process applications).
The discussion repeatedly returned to Dixie Springs. Board member Corey said the cost to replace failing transmission pipe and mains in Dixie Springs is roughly $24,000,000 and that the board cannot expect a single one-time rate change to cover the full need. Clark and other members described recurring "band-aid" repairs and rising costs: Clark said the district spent about $890,000 buying water from the larger water district last year and that the board currently spends $200,000to $300,000 a year on temporary repairs.
Board members discussed design options for an equitable approach: keep the base (minimum) charge relatively low to avoid disproportionately hitting small users, increase upper tiers to target high-volume outdoor users, and consider applying a modest base-rate increase while giving an initial allocation of usage (for example, the first 5,000 gallons) to soften the effect for low-usage households. Several board members urged that any revenue increase earmarked for infrastructure be placed in a dedicated account and not diverted to general operations.
On next steps, the board directed staff and Clark to assemble multi-year project lists and cost estimates (at least a five-year horizon) for non-impact-fee maintenance projects and to run rate scenarios tied to specific funding goals. At the meeting's close, members generally expressed consensus to pursue modeling and bring concrete revenue scenarios back before the council and the board for further consideration.
Votes and formal actions taken at this meeting were limited to approval of the May 27 minutes by voice vote. The board agreed to task staff to prepare the cost and rate scenarios described above.
