By Austin Wright
The Truckee Meadows Water Authority is expected to raise water rates by 3 percent in May to make up for a $9.5 million revenue loss caused in part by water conservation efforts in 2016. Operation cost increases also contributed to the shortfall.
Total water sales revenue was only $87.5 million in 2016, which is a 10 percent drop from the $97 million of revenue seen in the previous fiscal year.
The average residential customer’s water bill is expected to increase by $1.42 per month starting May 2017 with an additional monthly increase of $1.47 in May 2018.
The TMWA board will vote on the increase Wednesday, April 19.
Raising water rates, which has been deemed critical by TMWA, will assist in recovering last year’s revenue loss and will ensure continued, favorable credit ratings, preserved cash reserves, and strengthened financial metrics for the organization.
May’s rate increase is the first of several incremental raises which are projected to fully make up for the revenue loss while preserving TMWA cash reserves. Rates will increase another 3 percent in the fiscal year of 2018, and then possibly up to an additional 2.5 percent for each of the following three years.
After the first two 3-percent rate adjustments, the rate increases will be subject to annual review to determine if they can either be lowered or deferred.
In total, the rate increase could be as high as 13.5 percent over five years if annual reviews find the rate increases appropriate. The TMWA board will have to hear and approve each rate increase.
Water rates were last raised by 3.4 percent in February, 2014.
The Wednesday hearing will start at 10 a.m. at the Sparks City Hall.