COTTONWOOD - After two years of talk, the Cottonwood City Council has finally agreed to move forward with a water rate increase, generating an overall 8 percent revenue increase of $1.8 million.
This time, low volume users get a break on rates. Tuesday, the council voted to adopt a Notice of Intent for the increase.
A public hearing will be held on the new rate structure Aug. 17. The new rates would take effect Dec. 17, 2010.
The council was given three options after a suggestion during earlier discussions that it reduce rates for low-volume users. It chose a middle ground by giving those who use less than 4,000 gallons a month a lower rate. The council rejected setting that break at 5,000 gallons.
Finance Director and Administrative Manager Rudy Rodriguez explained that the intention in setting the rate structure was to make sure that the target revenue remained the same.
That means that if low volume users get a break, the burden would fall on higher volume users.
In the past, the base rate included the first 1,000 gallons of consumption.
The proposed structure would still include the first 1,000 gallons with the base rate ($18.36) at no additional charge. But, the next 4,000 gallons would be charged at $2.90/1,000 gallons. That is a break from the anticipated $3.13/1,000 gallons that would have been charged using the old structure.
The next tier of water use from 4,000 to 10,000 gallons will cost $3.19/1,000 gallons. From 10,000 to 20,000, the cost increases to $4.55/1,000 gallons. Above 20,000 gallons, the cost increases to $6.48/1,000 gallons.
Some 15,000 residents, or over 50 percent of the 28,400 water users who use less than 4,000 gallons a month, will benefit by the lower rates