RICHMOND—The first in a series of water rate hikes will start as early as July, due to the city’s proposed $5.14 million water improvement project that includes a new 2 million-gallon water tank, City Council members said at Tuesday’s meeting.

In a series of rate hikes over the next three years, council members said residents could end up paying $12 per month more for the base water rate, jumping from $28 to $40 per month for those who use less than 10,000 gallons in a month.

Water rates will increase in 2011, 2012, 2013, Mayor Mike Hall said. “Part of the reason we’re not (raising it all at once) right now is because we don’t know exactly how much we’ll be borrowing.”

To fund the water improvement project, which includes the water tank, a well, chlorinator building, monitoring system and the fixing of old pipes and water flow problems, Hall and a few city employees will appear before the Community Impact Board in Salt Lake City May 5 to request a $5.14 million loan from mineral-rich counties in the state that have revenue to spare, Hall said. If the project ends up costing less, the city would not be obligated to use the entire $5.14 million, and has three years to come up with 125 percent of the interest due on the loan, he said.

The minimum interest rate that the CIB board can offer, according to their bylaws, is 2.5 percent, Hall said. “So if we go 2.5 percent on that money, we would then have an annual payment of $307,500.”

Hall said he divided $307,500 by 700, or roughly the number of hookups in the city, and then divided that number by 12 to determine what the monthly payment for each hookup would have to be. He said raising the rate to $37 per month for the first 10,000 gallons of water used would give Richmond the money it needs to cover the interest on the loan by 2013, but if the CIB board offers a higher rate, Hall said water bills could end up at around $40 per month.

“They said the rate won’t go over 4 (percent), historically,” Hall said, but he estimated the CIB board will offer a lower rate or 2.5 to 3 percent. Either way, he said the CIB board should have a decision for Richmond by June.

City Engineer Darek Kimball said the contracts for the project should be completed and signed by the end of July and work on the project could start as early as this fall, or the following spring.

A public hearing will be held May 17 to discuss the status of the project and the increased water rates.

In other business:

• The council voted to move $250,000 in capital improvement funds currently invested in the state of Utah to a 24-month certificate of deposit (CD) with Cache Valley Bank. The rate will increase from 0.5 percent to 1.8 percent with the move, and although the funds will be less accessible in a CD, City Recorder Justin Lewis said Cache Valley bank has agreed to allow the city a one-time emergency withdrawl without penalties, if needed.
• Mayor Hall said the city has been doing its best to keep culverts cleared and drainage systems free to avoid major flooding, and asked that residents be on the lookout for blocked culverts and other potential flooding hazards. An emergency response truck is loaded with sandbags and parked in front of the fire department in case of a flood emergency.
• Pending an inspection of the property and drainage system, Robert Jones of Precision Solutions, Inc., a metalworking company in Logan, was granted a business license to operate in Richmond. If all goes according to plan, Jones said Precision Solutions could be operating in Richmond within the next four to six months.
• Councilman Jeff Young said the Black and White Days committee has ordered 1,100 “juniors” ice cream sandwiches from Fat Boy to give to participants in the parade. Councilwoman Terrie Wierenga said the Richmond Black and White Days event more than doubled in size last year, and ran out of ice cream even though 1,000 juniors were ordered. The council is expecting a similar turnout this year.
• Council members discussed working with the country sheriff’s office in coming months to create an ordinance that would ban skateboarders from skating in the middle of street in the interest of public safety.

Published in cooperation with the Hard News Cafe. Original story is here.