Start with our current water rate

At our current water rate, the City is losing approximately $100,000 per year (about $4.00 per home per month) operating the Hillcrest system. A private company will have to raise rates to cover this loss.

The estimated cost to repair the Hillcrest system is a little over $5,000 per home based on the roughly 3,000 homes in the Hillcrest 2/3 system (this comes from the Hillcrest Ad Hoc committee meetings). If this amount is spread over all 4,000 homes in the Hillcrest system, it drops to about $3,750 per home. It was estimated repairing the system would result in a fee of $28 per month to Hillcrest 2/3 customers. However, this fee was based on a roughly $5,000 loan at 2.3%. A private company will not have access to these below market rate loans. With a $3,750 loan at 6% amortized over 20 years, the payment will be approximately $27.

The P.U.C. will authorize a reasonable profit of about 10%

Total estimated monthly payment

Costs change, things happen and we are not experts in these matters. Do not take this to mean that $56.00 per month is a firm figure. However, it seems clear that we will see a dramatic increase in water rates if the Hillcrest water system is sold to a private company.

It also seems clear that the water bill from a private company will be significantly higher than the estimated $45 per month that the average homeowner will likely pay if we convert to the City's surface water system.