The ad-hoc committee and City Manager Daly, representatives of the AWA and Bob Reed, who produced the study, met and discussed the report at great length by reviewing it page by page. Daly commented at one point that, “It is hard to find something to criticize. The methodology looks solid; I wasn’t able to see discrepancies or inconsistencies.”  Daly went on to explain that this analysis is the first cost of service analysis that the water agency has been performed since 1998. The report was stimulated, in part, due to the addition the City of Plymouth as a treated water wholesale customer. The analysis looks at eight cost categories and weighs each category for each customer class depending on the amount of service in each category, explained Daly. “The Fixed Capacity Costs included source of supply, water transmission, water treatment and water distribution. Fixed Customer costs represented the fifth category. The final three categories were related to the variable commodity- costs that fluctuate with the amount of water purchased. These included raw water, treated water and distributed water,” explained Daly.

As the City buys wholesale treated water from the agency they are not charged for the distribution costs and Daly added that a nominal cost was charged in the fixed customer costs.  He explained in a memo that the report “shows that the City used 31.4% of the treated water purchased from AWA and 24.91% of all water purchased from the AWA.” Daly made it clear at one point that the rate increases are a result of the AWA’s revenue needs for the upcoming year. “Basically, the percentage of cost for each category and customer class was determined, then spread over the total revenue need of $3,831,000.” The Amador Transmission Pipeline was cited as being a significant factor in the budget increase as costs grew from $13 million to $19 million due to delays in the project, identified by the agency as litigation that delayed the certification of the Environmental Impact Report. Agency District 1 Director Heinz Hamaan made it clear to both City staff, agency staff and the public that he felt there are cuts that can be made to help lessen the impact on the ratepayers. “I am profoundly disappointed that the agency has the “where with all” to finance a project for 23 million dollars of bonds but can’t seem to come up with a 2% operating budget reduction. 2% for (the) 07-08 (fiscal year budget) would be about $65,000. At the budget workshop (on June 13th)” stated Hamann. “I brought forward several budget cut items for discussion and they were listened to, evaluated, and discussed amongst board but not adopted.” Hamaan prepared some analysis that will be discussed further at the AWA’s budget meeting that is to be held June 28th. Daly pointed out that during review of the agency’s budget it was made very clear after public comment that the Plymouth Pipeline costs will not be borne by Jackson ratepayers.

In closing Daly said, “The impact to the City of Jackson water customers will require an evaluation of the City’s water department revenue needs after the AWA increase is finalized.” If the rate increase is adopted with the initial 22% increase it would add an expenditure cost of $131,500 to next year’s city budget; representing an increase of 7.8% in the total water department budget. It was pointed out that the budget varies greatly year to year due to the City’s capital improvement projects- so a detailed analysis will have to be done if the rate increase is adopted in order to determine an appropriate increase to the Jackson ratepayers that would allow for a self sustaining budget. The AWA will be holding a budget hearing as well as a hearing for the proposed rate increase on June 28th during their regularly scheduled meeting at 9am at the agency offices located on Ridge Road.