Price City outlines possible water rate increases, weighs higher exchange fees with neighboring systems

Price City officials on the council’s regular meeting said they plan to propose higher charges for water exchanges with neighboring providers and a multi-step increase in customer water rates to finance pending treatment and transmission projects.

The councilor who led the discussion said the city’s long-standing interlocal exchange rate — historically set in 1985 — is far below current value and that officials are considering raising the fee to reflect inflation and operational costs. “In 1985, we agreed to 12¢ per thousand pounds exchange rate,” the speaker said, adding that inflation calculations put that figure at about “36¢ in 02/2025” and that a new rate could be “closer to 50¢.”

Why it matters: Council members said the proposed changes are intended to stop effectively giving away local water while the city faces large treatment and pipe projects that will require debt or outside funding. The staff member leading the revenue discussion said the first of three planned rate increases would be the largest and that public hearings on the adjustments will be scheduled “pretty soon.”

City officials gave specifics for the initial package under consideration: a 20% increase in tiered and base rates for the first step that would raise the average residential monthly bill from $32.76 to $43.44 — an increase of about $10.68 per month — and a projected $585,000 in additional revenue for the budget. Officials said they expect two further smaller increases over the next two years to reach the revenue needed for debt coverage on planned projects.

Councilors and staff emphasized the sequencing and public notice: the first and largest increase is being proposed up front, with follow-up increases contingent on economic conditions and project financing needs. “If we don’t get it on the next agenda, it’ll be on the next,” a council member said, urging public outreach so customers can plan.

Officials also discussed the wholesale/exchange arrangements with Wellington, Helper City and a regional wholesaler (referred to in discussion as “priewide” and “priewide / priewidewide” in the record). The city currently exchanges water at a materially lower rate than replacement cost or retail equivalents, and staff said the exchange policy will be refined and likely brought to the council for adoption in one or two meetings. One staff member noted that Helper City’s current agreement charges 25 cents per thousand gallons in certain conditions and that the equivalent cost when using wells may be closer to “50¢–60¢.”

Councilors said the city will establish a formal emergency/temporary rate if water must be provided on short notice, and that raising exchange fees significantly could prompt partner systems to decline exchanges. “If we raise it enough, they may not even want to exchange anymore,” one councilor said, noting that the city would not consider that an immediate problem.

The councilor and staff repeatedly tied the rate conversation to capital needs: treatment-plant upgrades, several pipe projects and anticipated debt coverage. They noted that the projects under consideration do not include all in-town line replacements, which have already been deferred and will need separate funding.

Officials urged early notice to large institutional customers including the college and school district so those organizations can plan for higher bills; the council said it will present a formal plan and hold public hearings before any rate changes take effect.

In closing, councilors said the city will refine proposed figures and timelines and return with a formal ordinance and public hearing schedule.