Amador County – The Amador Water Agency board of directors on Thursday approved an extension to a water rate and financial plan study of the Amador Water System, which could lead to a rate decrease in the city of Plymouth.

The AWA board approved a $12,000 increase in the contract with The Reed Group, for the study which is about 75 percent complete. AWA Finance Manager Mike Lee in a report to the board said the “financial plan serves as a planning and management tool to ensure that the operations and capital improvement needs of the AWS can be met in a financial sound manner.” It also “ensures a fair distribution of cost services between various user classes.”

Lee said issues in the original scope of the study included considering the agency “debt service obligations in developing financial plan and water rate recommendations,” and considering tiers rates to help the agency meet conservation objectives. It also sought to “develop water rate schedules consistent with cost of service principles.”

The draft financial plan was reviewed during two workshops, then in August 2010 it was referred to the budget and finance committee. General Manager Gene Mancebo said Reed’s spread sheets are complete, but they need verbiage, and the study could take a couple of more months.

The study, when complete, could be used as the basis for rate changes in the Amador Water System, which includes systems in Jackson, Ione, and Plymouth. At least one of those changes was expected to be a decrease in rates.

AWA General Manager Gene Mancebo said it should bring down the rates in Plymouth, which joined AWS with the completion of its potable water pipeline. Mancebo said the impacts and cost share were estimated in 2007, and Plymouth is “using less water than anticipated.”

“Their shared cost should go down,” based on low usage. Plymouth Interim City Manager Jeff Gardner said “it’s going to affect Plymouth positively,” because they overestimated the amount of water the city would be using.” He said: “Essentially, we think we will get a 10-15 percent decrease.”

Gardner said it will impact the city’s debt service on the pipeline, which is about $200,000 annually.

Plymouth’s cost and benefit analysis as a whole, done on each segment of the pipeline was re-estimated, Gardner said. The debt service cost sharing was built on a benefit analysis, showing Plymouth net share of costs would be 65 percent. After the re-estimate, Plymouth’s net share of costs dropped to about 60 percent.

Story by Jim Reece This email address is being protected from spambots. You need JavaScript enabled to view it.