November 2, 2005

Proposed 2006 Annual Budget Under Review

WaterOne’s 2006 Annual Budget has been presented to the utility’s Governing Board for consideration.   A 4.3% rate increase for all customer classes is required to support the budget.   The typical residential water customer would pay an approximate $1.20 more per month if the proposed increase is implemented.  

A public hearing has been scheduled for November 8, 2005 at 7:00 p.m. to receive comments about the proposed increase.   The hearing will be held at WaterOne’s Administrative Headquarters, 10747 Renner Boulevard, Lenexa.

Despite a projected overall increase of 7.1% in operating expenses for 2006, WaterOne customers will be paying only an additional 4.3%.  This is possible because of increasing operating efficiencies at the utility.  For instance, more customers will be served per employee in 2006 than in any previous year.  Only one additional position has been proposed for the 2006 budget. 

Inflationary factors are key contributors to the proposed increase.  Some of these include chemicals and power for water treatment, and insurance.    Another factor is the rate ‘smoothing’ approach WaterOne has taken to fund Phase V Expansion.   This approach spreads a series of smaller rate increases over several years in lieu of having more dramatic rate spikes occurring in any single year.  

The utility is also investing heavily in the maintenance and renewal of existing infrastructure, as well as, new infrastructure to accommodate growth.  In 2005, $17.9 million was budgeted for annual capital and master plan projects; in 2006, $20.4 million is budgeted--a $2.5 million increase (14.2%).  This amount represents nearly one-third of the total proposed 2006 Annual Budget of $71 million. 

Customers of WaterOne have enjoyed very stable rates.   There have been only two rate increases implemented previously since 1998.   Even with the proposed increase in 2006, WaterOne’s rates continue to average below the inflation rate compared to the K. C. Metropolitan Consumer Price Index (CPI) for Utilities and Fuel.  WaterOne rates have increased an average of 1.8% over a five-year period, including 2006.

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