Water, sewer-rate study projects increased rates for Carson City

A rate study projecting annual boosts in Carson City of up to 6.5 percent for water service and 17.5 percent for sewage was laid out for the Board of Supervisors on Thursday.

Those were the largest rate hikes projected in a study done by FCS Group for city government, with optional scenarios ranging from no increases to lower rate boosts. It included depreciation financing, or what was called system reinvestment funding, for ongoing needs.

“You would have solid fiscal policies,” said Karyn Johnson of FCS Group, speaking of a 6.5 percent water-rate increase annually over the next five years.

Other water scenarios called for hikes of 2.5 percent annually, 4 percent annually or no rate hike, which basically was to show a base or benchmark from which the study worked.

Sewage-treatment options included none, 17.5 percent a year, 9.5 percent or 14 percent. The lower percentage levels would stretch out the number of years to reach fiscal comfort, the board was told.

Supervisors asked numerous questions during Johnson’s presentation, which also looked at rate allocations among various classes of users.

In that portion of her analysis, she said current single-family and duplex residential water-use rates, with normal and peak periods combined, raise less than they cost while other categories — multi-family, government, commercial and large commercial — pay more and are subsidizing the single-family category.

Based on that, the study showed a rate reallocation would boost residential rates 13.6 percent over five years; multi-family would drop a quarter, while commercial and large commercial would decrease 16.4 percent. However, she said, the reverse was somewhat true on sewer rates: Residential is being overcharged while the other categories are being subsidized to an extent.

This portion of both the water and sewer analysis was based on 12 months of data covering actual Carson City use and rates.

As the board reviewed the rate-allocation study and projected scenarios, several members and city staffers noted Carson City is in a financial bind regarding needed upgrades or some other method of dealing with an aging sewage-treatment plant that may cost upwards of $40 million to repair or replace.

Also in the study was a comparison with Sparks, Washoe County, Lyon County and Douglas County of such rates. It showed Carson City is slightly lower than Sparks, roughly two-thirds of Washoe and Lyon counties, and just over half of Douglas County in combined water and sewer rates.