For Immediate Release                                                 January 26, 2010

 

  

The Board of Directors has passed a  7.9% increase in water rates.  This change represents an increase of approximately $2.50 per month for the average household of four. 

 

The chief factors contributing to the rate adjustment are the following:

 

1.  A continued decline in system-wide consumption of approximately 2.5%, resulting in a loss

     of water sales of approximately $427, 500.

 

2.  Other losses in revenue of $283,000 from decreases in:

            a.  Interest earnings on restricted reserve accounts ($136,000) due to lower interest rates;

            b.  Hydro-electric power sales ($87,000) due to reduced electricity purchase rates;

c.  Reduced laboratory services for other water utilities ($60,000) due to fluctuations in

     required sampling programs and a greater number of federally licensed laboratories.

 

3.  An increase of $183,000 in the required payment to the NYS Retirement System.

 

Spending in other areas of the budget has been reduced by $471,000. Therefore, the remainder of the spending plan that is unaffected by the above factors is increasing by a total of only 2.3%. In other words, if the increase in the Retirement System is backed out, and the decline in consumption and other revenues did not occur, the required increase in rates would have been 2.3%

 

The MVWA’s long term rate model shows that growth in the regional system by assisting other nearby towns with their water problems and shortages could have limited rates increases during the past five years to 1-2% per year. The MVWA will continue its efforts to preserve its existing rights to use additional amounts of water for future consolidations in order to provide rate stability and reliable supplies throughout the Mohawk Valley region.

  

Another item of additional expense in the  budget is the result of a new EPA standard that will go into effect in 2012. To comply with this rule, the MVWA will enhance the water filtration process by retro-fitting the filter beds with “granular activated carbon.”  Based upon our independent study, the annual cost will be approximately $850,000.  The budget includes introducing $150,000 of those costs into the rate schedule to avoid a future rate shock. 

 

The  budget includes $1,509,000 million for operating items that were previously paid for with borrowed funds through the sale of bonds.  The Board of Directors phased this amount in over a six-year period in an effort to discontinue the practice of bonding for certain categories of operational items that were formerly paid for with interest over a 30-year period. This equates to a savings of $26 million in interest costs over a thirty year period and underscores the agency’s commitment to long-term planning and sound fiscal management.

 

 

The Mohawk Valley Water Authority is a regional agency that provides drinking water to approximately 126,000 customers throughout 18 municipalities in Oneida and Herkimer Counties. Contact the MVWA at 792-0301.

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