Eureka hears water-rate analysis showing multi-thousand-dollar shortfall, options for phased increases

Janelle Braithwaite, management technician for the Rural Water Association of Utah, told the Eureka City Council during its March 24 work meeting that the city’s current water rates leave the utility about $51,000 short of the budget goal and recommended planning incremental rate increases and ordinance-based rate schedules.

Braithwaite said she compiled 12 months of customer usage and the city’s budget into a Google Sheet that city staff and the mayor can copy and use to model rate changes. “This is a tool to help you do that…there’s no cost to the town of Eureka, but this is gonna be a tool that can help you for years to come,” she said.

The analysis showed the city’s current average monthly water bill at $65.86. Under an illustrative $4 base increase and a $1 per thousand-gallon increase on a higher tier, Braithwaite said the average bill would rise to $73.44 and generate about $28,000 in additional annual revenue — leaving the utility still roughly $22,000 short of the budget target and about $5.97 short per connection per month under that example.

Braithwaite told the council the sheet treats a target “goal number” (the revenue needed to meet expenditures and a savings target) as distinct from one-time or variable revenues such as connection fees or interest. She also noted the spreadsheet is a “living document” that can be updated as bond payments, new loans or other factors change the numbers.

Nut graf: The presentation underlines that Eureka’s water enterprise fund needs a combination of rate adjustments, improved meter reads and reserve planning to meet both operations-and-maintenance costs and expected long-term loan/reserve requirements tied to state and federal funding. Braithwaite recommended adopting a multi-year, ordinance-based rate schedule and improving data quality before any final changes are approved.

The consultant walked the council through other specifics that affect funding eligibility. She explained that state grant eligibility for principal forgiveness is tied to median adjusted gross income (MAGI) data derived from state tax returns; she said the statewide MAGI is roughly $56,000 and Eureka’s MAGI in the state database is about $53,000.

Braithwaite also contrasted MAGI with median household income (MHI) used by federal programs such as USDA Rural Development; she said those figures come from the U.S. Census and reported Eureka’s MHI as $61,202. Using the MHI metric, she said Eureka appears to be at roughly 75% of the statewide value and therefore in a stronger position for some federal programs.

She described the different flexibility of funding agencies: USDA Rural Development, she said, offers little wiggle room on loan/grant mixes, while the state drinking water board (the State Revolving Fund) can sometimes offer lower interest (0% or 1%) when the board sees a community has acted to stabilize rates and demonstrate fiscal responsibility.

Braithwaite emphasized reserve requirements tied to state-funded loans: borrowers typically must save the equivalent of one annual bond payment (built up over the first 10 years) and hold roughly 5% of the water fund in reserves for the life of a loan. “If you have hard times, you’ve got one payment sat there,” she said, describing how the requirements work in practice.

Council discussion focused on mechanics and timing. Council members asked about reasonable phasing (examples ranged from 2–3% annual increases to a dollar-amount or percentage-based multiyear schedule). Braithwaite recommended adopting rate adjustments at the start of the new budget year and noted a recent change in state law that requires rate changes to be adopted by ordinance rather than by resolution. “A really good time to look at it is your new budget year…this is something that we’d want to have in place by July,” she said.

The presentation also flagged data-quality issues. Braithwaite showed that many accounts register zero reads in some months, which she and council members said can mask lost revenue and distort per-connection averages. She recommended cleaning up meter programming and reading errors and using the spreadsheet to identify anomalous meters and high users; the sheet showed roughly 65–83% of customers use 10,000 gallons or less in typical months.

Braithwaite suggested structural options the council could consider: lowering the first-tier usage threshold, adding additional higher tiers to shift more cost to heavy users, or reintroducing separate commercial rates for true commercial customers. She noted the state requires an increasing-block (graduated) rate structure for systems that exceed 500 connections when seeking certain funding, but said even small systems can benefit from graduated tiers to encourage conservation and match costs to users.

She also offered to continue working with city staff — remotely or in person — and said she can share a template ordinance and modeling scenarios for council review. On safety and staff training, Braithwaite recommended the city pursue a local safety grant program she used in Gunnison through Utah Local Governments Trust, including regular monthly training and modest equipment purchases as part of a loss-control program that can reduce insurance costs.

Ending: The council took no formal action on rate changes at the meeting; Braithwaite encouraged staff and elected officials to use the modeling tool, improve meter accuracy and plan for an ordinance-based, multiyear rate strategy timed to the city’s budget cycle.

Quotes used in this article are drawn from the meeting transcript and are attributed to speakers recorded in the meeting.