Mallory Valley Utility District is pleased to announce that it has cancelled a rate increase scheduled to go into effect in October 2020, which would have impacted all residential and commercial water customers.
Mallory Valley Utility District
Planned Rate Increase for October 2020 Cancelled
Mallory Valley Utility District is pleased to announce that it has cancelled a rate increase scheduled to go into effect in October 2020, which would have impacted all residential and commercial water customers. The District approved an overall rate increase of approximately 6% in 2018, to be implemented in two phases. The first phase occurred in 2018. The second phase was scheduled to occur in 2020.
The District decided to increase rates in anticipation of several large capital improvement projects. In order to meet the long-term water needs of our present and future customers, the District is investing in several projects that will replace and extend the current water system infrastructure. The first of these planned capital improvement projects began in 2019. The remaining projects will be completed by the end of 2022. The debt costs, increased depreciation costs and increased operating costs related to these capital improvements required additional revenue.
The second phase of the rate increase, which is now cancelled, would have increased every residential and commercial customer’s bill by approximately 2%. The decision to cancel the upcoming rate increase was made after a thorough review of water rates, short-term and long-term revenue streams and operating costs. One major factor was that the District managed to issue its 2020 bond at a lower than expected interest rate, which will save the District a considerable amount of money over a 25-year period. In addition, the District’s staff is always looking for opportunities to reduce operating costs.
Many customers are facing economic hardships caused by the coronavirus pandemic. The District provides an essential public service, the importance of which is even clearer now. By cancelling the upcoming rate increase, the District hopes to provide additional relief to customers during this difficult time.
The District monitors both revenue and expenses closely. Any decisions on future rate increases would be discussed with the Board of Commissioners at the appropriate time. Rates, revenues and operational costs are thoroughly reviewed at least annually.