Casper City Council Will Stop Subsidies for Water Tap and Other Fees
Casper residents through their utility bills have been subsidizing public services such as water tap fees for decades, and the City Council intends to fix that.
"These fees are dramatically lower than they need to be, and as a matter of fact we probably have a subsidy rate of close to 100 percent, and I would suggest we don't need to be there with regard to these particular services we provide," City Manager Carter Napier told council at a work session Tuesday.
In 1986, the city approved fees for water and sewer tap fees, water meter charges, water service line abandonment inspection fees, and building fire line and fire hydrant flow testing fees.
They haven't changed since the city dissolved its Board of Public Utilities in 1991, which means the city isn't recovering its costs and utility ratepayers have been picking up the rest of the tab.
"All we are looking to do is recover our costs," City Public Services Director Andrew Beamer told the council.
For example, the city charges $145 to connect a building to a three-quarter-inch water main, which is the standard pipe size serving most residential customers.
That's far less than the actual cost of $827 for a connection to poly pipe, Beamer said.
Similar discrepancies exist in sewer tap fees, meter charges and other services, he said.
Napier said the city has some flexibility in how to implement the changes.
Council members agreed for the need to raise these rates, but disagreed when and how to put them into effect.
Shawn Johnson and Bob Hopkins wanted to see the new rates put into effect as soon as possible, especially in light of the city's financial situation.
But Dallas Laird said its unfair to impose the new rates all at once, and suggested a gradual rate increase.
Johnson responded that it wasn't fair for utility rate payers to subsidize the existing system.
Charlie Powell added that the new rates will not adversely affect home or other construction, because they are negligible compared to the overall construction costs.
After the discussion, all council members except Laird tentatively approved the resolution to change these fees.
Beamer later said council considered changing these rates in the past, but declined to act because previous proposals were connected to water and sewer system investment charges, Beamer said. The new proposal is separate from water and sewer system investment charges, which council updated in June.
The new rates will affect those who are building and buying new houses, changing the use of an existing building, or those wanting inspections of certain utilities, he said.
"For the most part, the public won't even see this fee," Beamer said. "
If anything, the new rates for water and sewer tap fees probably will mean residents' monthly utility rates will remain lower than they might have been without the changes, he said.
The current charges for water and sewer tap fees bring in about $200,000 a year to the city. The revised rates will raise that to about $800,000, which means regular users of utilities won't be subsiding the water and sewer tap fees by $600,000 a year, Beamer said.
"That will absolutely have an impact on any future rate increase," he said.