Archive for Thursday, January 28, 2010

Delaying rate increases not a good thing

January 28, 2010

A seasoned city administrator once told us that while it may make them popular, city councils don't do their residents any favors when they put off raising utility rates. Eventually, councils are forced to raise them anyway. And rather than incremental increases, those delayed increases can cause sticker shock.

Late last month, the Eudora City Council approved a $2 increase to the city's month per-meter customer charge. There can be little doubt the rate increase was overdue as the water department fund ended the year with $6,000 in reserve. Only $346,000 from the electric utility fund kept the water department solvent.

The situation developed in part because the wet summer limited use, conservation efforts from customers in a down economy, costs associated with the Douglas County Rural Water District 4 lawsuit and the absence of collection fees with only three housing starts. But it's difficult to imagine that despite those factors reserves could have been projected to be anything like what they should be.

Part of the increase will be used to pay for upgrades that are to improve water quality. That's great, but the water department's rates — and those of all city utilities — should support a self-sustaining budget, an adequate reserve and a capital budget for improvements. It’s wonderful the city’s electrical utility fund could cover the water department’s needs, but ideally that money would have been saved or spent to make that department more efficient.

City Administrator John Harrenstein appears to understand the need to get the city on a more rational budgeting course, with utility rates set at self-sustaining levels. We hope this view is reflected in coming budgets.

Comments

gardengirl 4 years, 5 months ago

why is Greg Dahlem retiring? Who retires at 50?!

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midgey4u 4 years, 1 month ago

good question? wasnt it in the newspaper? if not we have a right to know why we now have a police chief we do not want

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