Author photo

By Karla Pomeroy
Editor 

Expenses soon to outpace revenues for Big Horn Regional

 

December 10, 2020



WORLAND — Big Horn Basin Regional Water System Manager John Joyce said expenses were increasing but revenues were not increasing at the same pace thus the Joint Powers Board would be faced with using reserves every day to meet general operating expenses.

That reasoning, as well as a recommendation from the auditor has led to proposed rate increases to its eight member entities — City of Worland, Washakie Rural Water Improvement District, Town of Greybull, South Big Horn Water Supply Joint Powers Board, Town of Kirby and Lucerne Water and Sewer Improvement District.

Joyce said there are eight water wells in the system, with only one owned by Big Horn Regional. Water from all eight wells serves all of the entities, he said, so no one entity is getting water from one source.

Joyce said the Big Horn Regional board has been discussing the possibility of raising rates for two years. “It looked like we would be headed in that direction so this is not a big surprise.”

The final prompt was this year’s annual audit in which the auditor, James Seckman told the board that expenses would start exceeding revenues and the board would have to start using the reserves.

During the Worland City Council meeting on Tuesday, Dec. 1, Worland’s Big Horn Regional board representative and city public works superintendent Brian Burky said the auditor also recommended 3% of the systems value be placed in reserves, which for the $50 million system would be $1.5 million. Current reserves are at $773,234.

Joyce said at the last board meeting in November, Nov. 18, he presented five options for their consideration. These were slightly different than those submitted to the Worland City Council last Tuesday.

He said the board is considering an EDU rate increase from $10.24 to either $11.50 or $12 per EDU, which is basically every tap on the system. He said each member of the system submits to Big Horn Regional how many taps are on the system and they are billed accordingly.

The $11.50 rate per EDU, along with a bulk water rate increase from 45 cents per 1,000 gallons to $1.05 per 1,000 gallons, would meet expenses and allow the reserves to grow for about eight years through 2029.

In 2030, the projections show that expenses, based on 2% annual increase in revenues and annual expenses, would exceed revenues by about $10,000. Reserves in that nine years are projected to increase to $1,485,329.

The $12 per EDU rate, coupled with a bulk water rate increase to $1.10 per 1,000 gallons is projected to last through 2030, showing a net gain of $35,154 of revenue over expenses. Reserves would grow to $1,929,291 in year 10.

Other options presented to the Big Horn Regional Board included one with a 2% annual increase in the EDU rate; a $12 per EDU rate with an increase in bulk water to just $1 per 1,000 gallons and an increase in the EDU to $11 and bulk water to $1 per 1,000 gallons. The latter rate would last only through 2027 per the projections.

Joyce said no one on the board was in favor of the 2% annual EDU rate increase.

Joyce said the Big Horn Regional Board is hoping to hear from the other entities in time for their Dec. 16 board meeting.

He said they must make a decision in the near future to give the other entities time to plan for the increase in their own upcoming budgets.

Big Horn Regional administrative assistant Julie Cross said they also have to allow 90 days for comments from the entities after the regional board makes a decision.

She said the regional board approves rate changes by resolution, which needs only one reading before the board.

Joyce emphasized that the Big Horn Regional board has not made a decision and is waiting to hear feedback.

Cross said the Washakie Rural Board’s next meeting will be on the same night as Big Horn Regional and the rate increase proposal has not been discussed, nor has it been discussed how to pass through the bulk rate increase. She said the EDU rate is a straight pass-through charge to the Washakie Rural customers.

The rate increases would not take effect until the 2021 fiscal year which begins July 1.

Big Horn Regional board members are Burky, Kyle Tharp for Washakie Rural, CJ Duncan for Basin, Jason Lampman for Greybull, Kent Cordingly for Lucerne and Chairman Don Russell for South Big Horn Water Users.

There have been three increases in the EDU rate, but Joyce noted the last one to the current rate of $10.24 was approved in 2005. Since the beginning of Big Horn Regional in 2002, there has only been the one bulk water rate, he said.

 
X
 

Powered by ROAR Online Publication Software from Lions Light Corporation
© Copyright 2024