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Eagle Mountain City conducts an annual review and analysis of its water fund budget. The City’s current water rates are not sufficient to cover its operating expenses. While the City strives for cost efficiency, well repairs and other unexpected expenses contributed to a reconsideration of existing water utility rates. The proposal coming before the Eagle Mountain City Council increases the consumption water utility rates by 14% beginning in October 2023. Consumption water rates will also increase an additional 12% for three years thereafter. Eagle Mountain City cannot profit from its water fees and cannot support its water operations out of the General Fund under state law. Revenues must be sufficient to sustain the City’s most essential service in a financially responsible manner.
2022 was the first year Eagle Mountain City considered adjusting its water rates in the last 20 years. Compared to neighboring cities of similar size, Eagle Mountain charges a relatively lower rate for its water supply. Given that such an extended amount of time was taken before revisiting water rates, the City’s water fund balance as a percentage of its operating expenses is projected to go negative by 2027. The proposed rate changes will keep Eagle Mountain City’s water rates low ensuring stronger financial performance in the water fund.
Costs are heavily scrutinized at Eagle Mountain City and every step has been taken to ensure efficient operations. A careful review and analysis has been conducted on projected revenues and adjusted rates have been calculated to mitigate the impact to residents while balancing the need for well-managed City services. By implementing this plan, the City can maintain a positive fund balance and ensure efficient operations for years to come.Â
Left: This graph illustrates what Eagle Mountain’s fund balance would be if these changes are not implemented. With no rate adjustments made, Eagle Mountain City’s fund balance would be negative by 2027.
The new base rate for commercial businesses will be based on water meter size, a common practice in other cities. The new base rate is calculated based on meter equivalent ratios, including the water capacity for each water meter size, as recommended by the American Water Works Association (AWWA). The primary reason for this change is to allow fair and impartial rates reflected in the service cost for each customer type (residential vs commercial users).
Q: Rates increased last year. Why are they increasing again?
A: While Eagle Mountain City increased its water rates by 30% last year, it’s important to note that prior to that, more than 20 years had passed since the last increase. Changing costs and better financial management of the City water system has necessitated another analysis and review of water rates to better manage this essential service.
Q: Why does the rate need to increase by 14%?
A: The 14% rate adjustment applies only to the consumption rate. Monthly bills will not be increased by 14% overall. This change translates to about $7 per month in the summer for nearly all water users in Eagle Mountain. This is the adjustment needed to properly operate the most essential service in the City.
Q: Is the change related to development in the community?
A: No. While Eagle Mountain City continues to adjust impact fees to provide water utilities to new developments, this rate adjustment better anticipates the aging and deterioration of our water utility infrastructure and increased operational costs.
Q: Is the change related to mismanagement?
A: No. The City reported multiple well repairs last year, which increased its operational expenses. Further, the economy-at-large has been experiencing difficulties relating to inflation, which has led to higher operational costs generally.
Q: Is the change related to the City’s water quality?
A: No evidence has been found to suggest that City water quality is poor. Repeated testing required by the state of Utah has shown it is safe to drink. This rate adjustment is completely unrelated to any perceived water quality issues.
Q: Is the change because of META, Tyson, Google?
A: No. Large industrial water users have previously purchased water rights prior to development. Eagle Mountain City carefully considers the availability of water before approving major businesses to develop in the community. All of these water users will be paying a much higher adjusted rate following the adoption of this plan than the average residential user.
Q: What about large-acre lots?
A: Lot size is not considered as part of this plan. Eagle Mountain City strives to be fair and encourages spacious lot sizes in its developments. Eagle Mountain City has allocated more water for larger lots to keep more residents in Tier 1 usage, and this plan accommodates that.
Q: Is the change because we’re not using enough water due to water conservation recommendations?
A: No. Water conservation is not a factor in these rate adjustments. This proposal is exclusively focused on operating costs and seek to generate revenues sufficient to cover those costs.
Q: Can the City cut costs elsewhere?
A: Cost cutting can be considered by the City Council as part of this proposal. However, Eagle Mountain City has significantly fewer water personnel than neighboring cities.
Q: Is there any assistance/subsidy programs available?
A: The Home Energy Assistance Target (HEAT) Program offers assistance to residents impacted by this change. More information is available at https://jobs.utah.gov/housing/scso/seal/heat.htmlÂ
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