Mountain Regional Water will need to raise rates in 2014 and 2015, along with possible annual rate increases through 2019, to keep up with escalating costs, said officials with the special service district at the Wednesday, June 25 work session for Summit County Council.

Mountain Regional Water serves more than 5,000 customers in the area surrounding Park City.

"The costs of doing business are out of our control," said Andy Armstrong, Mountain Regional Water general manager.

In August, the district will be requesting a rate increase of 3.5 percent effective that month, and a second increase of another 3.5 percent effective in August, 2015. The last rate increases became effective in August, 2012.

The need for the rate increases are due to Mountain Regional's three largest budget items, which are projected to increase an average of $275,560 each year, Armstrong said. The budget items' increase amounts to about 4.75 percent annually.

The costs are far larger than the annual revenue Mountain Regional receives from its water sales, Armstrong said, which ranges from $29,000 in a weak economy to $110,000 in a strong economy.

The three budget items necessitating the rate increase are:

  • Rocky Mountain Power costs

  • Weber Basin lease fees

  • Debt service (bond payments and required debt coverage for existing debt)

    Another reason for a rate increase is that it is possible impact fee collections could go down, with most of new developments in the near future (including the Silver Creek Village Center) having prepaid their impact fees. Impact fees, Armstong said, are one-time fees assessed on the developer of a development or the home buyer upon water connection. These fees are used to pay the capital impact of connecting a user to the system.

    Summit County Manager Bob Jasper said that he will soon sit down with his budget team and district officials to work out the details of the proposed rate increase, which needs to be approved by the county council.

    Armstrong said the district will ask for increases only for the next two years.

    Mountain Regional Water has several different rates, each dependent on variables such as usage patterns, location, and elevation. Residential rates range, depending on those variables, from $56 to $73.25 per connection.

    Mountain Regional will be requesting an additional work session with the county council on Aug. 6, with a public hearing on Aug. 27.

    Mountain Regional, according to its website, serves the following developments:

  • Promontory, Silver Gate

  • Old Ranch Road

  • Atkinson, Park Ridge, Silver Summit

  • Silver Creek Commerce Center

  • Newpark, Spring Creek, Woodside Homes (Plat I)

  • Glenwild, Red Hawk, The Preserve, Stagecoach Estates

  • Silver Springs, Quarry Mountain, Willow Creek, Sun Peak

  • The Colony

  • Summit Park, Timberline