Council approves new rate study

The City of Sundance is preparing to commission a new rate study – a document that not only guides the council in determining whether rates need to be raised each year, but can also be a component in the process of securing grant funding.

A rate study analyses the operating costs of a city’s water and sewer systems and makes recommendations on the rates that are necessary to ensure these enterprise accounts meet their mandate of being self-sufficient, both now and over the next few years.

The last time that Sundance completed a rate study was 13 years ago, said Clerk-Treasurer Theresa Curren last week.

Since that time, in accordance with the recommendations made, water and sewer has seen modest increases in all but two years.

While the previous study has been useful in setting rates, she said, 13 years is too long ago to count as current for the kinds of grants that the city generally aims to go for.

A new study, she added, would also help the council understand where things stand and whether their decisions over the last decade-plus have kept the finances in working order.

“We need to know what it costs to pump 1000 gallons of water and we need to know how much to sell those gallons for,” agreed Mayor Paul Brooks.

The city budgeted for a new study this year because it was already known that one would be needed, said Curren. Around $34,000 was set aside for the purpose.

However, she told the council, the quote received from rate analysts Carl Brown of Missouri came in significantly lower because the same firm completed the previous study, which meant it wasn’t necessary to start from scratch.

The council approved the quote and authorized the rate study at a cost of $13,784.