Eagle Mountain City has historically had some of the lowest utility rates in Utah, especially for a City that does not have a secondary (irrigation) water system.
The ability to keep rates relatively low is due to several factors. Primarily, Eagle Mountain is a young city and has not required substantial maintenance to its infrastructure. These circumstances, combined with a culture of frugality have allowed the city to keep utility rates as low as possible for as long as possible.
“Eagle Mountain City has tried in earnest to exhaust all possible options before adjusting utility rates,” said City Spokesperson Tyler Maffitt.
Utility rates in Eagle Mountain had remained essentially unchanged for 20 years until early 2020. It was determined current rates would soon be unsustainable.
“The current rates have been insufficient to generate the revenue needed to cover expenses for a few years now. Eagle Mountain City has used every tool at its disposal to cover growing costs without raising rates, but those tools have now been exhausted,” according to the 2022 Utility Rate Study conducted by the City.
Rate increases were announced in the spring and took effect in early June. The increase has not gone unnoticed by residents.
In the comments section of a Facebook post in the Eagle Mountain City Citizens Facebook group, residents shared snapshots of their water meters over the past year, comparing 2022 readings to the same time last year.
“Ours has been almost double the last 2 months,” said Marla Van Tassell Anderson, a member of the Eagle Mountain City Citizens Facebook group.
“Our bill was almost 100$ higher and we haven’t been watering as much. I’m going to call them and see what is up with it,” said another group member, Malina Lucas.
In addition to the spring rate increase, several water meters around the city require maintenance and must be read manually by City water technicians.
If a technician can only read a meter every other month, then a resident’s bill will look much larger than it actually is, charging for two months every other month rather than once per month.
The objective of the two-year Utility Rate Study was to determine the minimum increase needed to provide the necessary revenues to become financially stable and prevent inconsistent meter-reading.
The 2022 Utility Rate Study points to several factors contributing to the need for increased rates, with inflation being one of the largest.
To keep taxpayer costs low, Eagle Mountain City’s utility rates were not adjusted to account for average annual inflation for 20 years. Inflation alone is a major factor that causes expenses to exceed revenues, even with a rapidly growing population.
The cost of water was another factor uncovered by the 2022 study.
Utah’s historic drought has made water sources increasingly scarce, and consequently affected the cost of water rights. Eagle Mountain is situated in a high desert climate and does not have adequate capacity to provide enough water to fill its resident’s needs from its own sourcing facilities.
The City must therefore purchase water from Central Utah Water Conservancy District (CUWD) to ensure sufficient water supply.
The final contributing factors discovered by the study are system aging and the health of utility funds. While Eagle Mountain is still a relatively young community, the City’s infrastructure is now beginning to experience normal wear and tear and needs maintenance.
Without adjustment, utility rates do not provide enough revenue to cover the costs of maintenance or the labor necessary to make repairs.
Eagle Mountain seeks to maintain a healthy utility reserve fund in the event of water emergencies or a need for mass repairs. With expenses exceeding revenues, that reserve balance steadily declines.
“With no changes, we would be negative by fiscal year 2024 which begins July 1, 2023,” found the study.
Water rates are split into two parts: base rate and consumption rate. The base rate is paid monthly regardless of water usage and the consumption rate is based on the volume of water used. The base rate covers the expenses of the city that do not increase due to water usage. The consumption rate covers those expenses that change with increased water usages, such as maintenance and equipment replacements.
Following the study, rates were calculated to ensure utilities remain stable in the coming years while only covering necessary operating costs and debt obligations to achieve the optimal balance of expenses and revenues.
“Eagle Mountain City staff will monitor revenues and revisit the rates every 2-3 years to ensure we are not over or undercharging,” the study says.
The increase in utility rates went into effect in May 2022. Rates are forecast to increase by 4% annually, though the first increase is not scheduled to take place until July 2023.
These rate changes are necessary for the health and stability of Eagle Mountain’s fund balance reserve. And, even with the rate increase, utility rates in Eagle Mountain are far lower than any other Utah city that does not have a secondary water system, and compete with those that do, the study found.
Eagle Mountain City is hopeful that the rate increase, though inconvenient for some residents, will stabilize balance reserve funds and lead to more consistent meter readings.
By balancing expenses with revenues, the City will be able to hire more personnel to keep up with maintenance schedules, repair meters and reserve funds in case of an emergency.
Eagle Mountain City would like to assure residents that the utility rate increase is in no way associated with the theft of $1.13 million from the City in a cybercrime earlier this year.
“It’s easy to point to an increase in your bill and name unrelated factors,” said Maffitt. “The state of Utah disallows the mixing of utility funds with any other budget line items. There is zero relationship between these two situations.”