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Staff explains why rate changes and revenues differ; October billing used for projections
Summary
Finance staff told the board they apply new rates to October billing (which includes quarterly bills) to estimate base revenue, which can make percent revenue changes differ from headline rate increases; staff plan modest adjustments and do not plan to increase connection fees.
Brent, covering revenue methodology, explained the district applies the proposed new rate to October billing data, which captures quarterly-billed accounts and provides a full-customer snapshot. He said this method can create small differences between the nominal rate increase and the projected year-over-year revenue change.
“...we take the October billing, which has quarterly billing in there... and we just applied a new rate to that amount,” Brent said, noting that account-count changes and service changes can shift revenue results. Staff said connection fees remain unchanged because they are an economic forecast (connection volumes were unusually high in 2023 and staff do not expect to assume higher levels for 2026). Board members asked about growth projections and whether county or building-industry data drive forecasts; Brent said the district does not rely on external economic forecasting for year-ahead connection assumptions and prefers not to overproject.
