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11.29.05 M.U.D. to vote on water rate hike Omaha-area consumers can expect about an 11 percent increase in water costs next year when M.U.D. adjusts its budget to compensate for simultaneously eliminating the property tax and building a new water plant. But because Metropolitan Utilities District is eliminating the property tax, the net impact on consumers' overall bills will be somewhat less than 11 percent. The utility is not planning to increase gas rates. The increase in water costs is a combination of a decision in July to raise the monthly service charge and the likelihood that the M.U.D. board will increase water rates next week. The service charge is a flat fee not affected by the amount of water used, and it generally pays for the utility's fixed costs. The water rate is the amount M.U.D. charges per gallon, with the total cost to the customer depending upon how much water is used. The board next week is expected to vote on a 5 percent increase in water rates. A public hearing on the budget is set for Friday. Most of the revenue from the water rate increase will help fund construction of the new water plant and well field, said Tom Wurtz, president of M.U.D. Money from the increase also will pay for other improvements, including a change in water treatment. The plant, being built in western Douglas County, will guarantee sufficient water for the metro area for at least a couple of decades, M.U.D. says. In July, the board agreed to shift the roughly $2 million cost of maintaining fire hydrants from property taxes to the utility's monthly service charge. For the average residential customer, that decision will result in an 85-cent increase in the monthly fee, effective January 1. The property tax that M.U.D. is discontinuing amounted to $6.90 this year for the owner of a $100,000 home. The proposed increase in water rates for next year is the first in a series of increases customers can expect to see over the next several years. M.U.D. has projected that it will need to raise rates more than 20 percent to pay for the plant. M.U.D. is not planning to increase natural gas rates in 2006, Wurtz said. Instead, M.U.D. will tighten its belt because consumers already are facing steep increases in heating costs due to record wholesale prices for gas. Most of the cost of winter heating bills is for the wholesale cost of gas, something M.U.D. does not control. M.U.D.'s share of gas bills is a small portion. In November, for example, M.U.D. accounted for about 5 cents for each $1 that customers paid the utility for gas. M.U.D.'s 2006 budget is projected to be $561 million, up from about $473 million this year. That translates into about a 19 percent increase, with a significant portion of that increase caused by the higher cost of gas. The board is scheduled to vote on the budget December 7. |
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