Expansion of customer base could lead to rate increases
KINGMAN – While the local economy is growing steadily and the City is experiencing customer increases in numerous operating funds, Kingman still has issues to resolve when it comes to its water and sanitation funds.
The Water Operating Fund has seen a customer-base increase of 3.4 percent to about 19,900 customers in Fiscal Year 2018. The fund’s balance has increased by more than $678,000 to $5.23 million. That increase results from personnel vacancies, capital outlay carryforward and increased transfers from the HURF and wastewater funds.
The Wastewater Operating Fund also saw a customer-base increase of about 3.8 percent, bringing the customer total to more than 10,600. The wastewater fund balance increased by more than $1.57 million, and now sits at more than $11 million.
“However, most of those monies, depending on the projects that we have funded, end up getting transferred into the wastewater capital projects fund,” explained Tina Moline, City finance director.
The Sanitation Fund saw a customer-base increase of approximately 3 percent with a FY 2018 total of about 11,200 customers.
However, as customer bases for these funds grows, so do expenses to the City.
“It’s very similar to the Water Operating Fund where our revenues do not meet our increased expenses,” Moline said of the Sanitation Fund. “And you’ll see that the fund balance this year, we depleted (it) by about $200,000.”
If the fund balance continues to shrink, then the City will have to take a hard look at the funding of sanitation trucks and capital.
“Well, if it continues to deplete, we are not going to be able to purchase that capital,” Moline said. “So we are looking at conducting some sort of sanitation rate study or coming up with some sort of fix for this …”
The City is also looking at water-rate increases.
“Even though year over year we’re adding customers to our water system, our revenues barely increase,” Moline explained. “Any time that we are providing to more customers, our costs are also going to increase. So we’re not able to keep up with the cost of … the operations of the water system, hence the reason why we have been working on a water-rate increase.”