FARMINGTON -- This city's largest employer will now pay the same commercial rate for water as other commercial customers.
The city council recently amended the consolidated culinary water fee schedule for commercial users by a 5-0 vote. The rate for residential customers will remain the same.
The new commercial rate is expected to have a significant impact on Lagoon, because the amusement park was charged at a different rate than other commercial users when new water rates were enacted July 1, 2010, as part of the 2010-11 fiscal year budget. The change also means Lagoon will pay the base rate for only two meters monthly, rather than four.
The change will lower costs for Lagoon, but potentially raise them for other commercial customers because of a change in the base fee for meters.
When the new rates were put into place, city officials promised to take a second look at the figures and usage and then possibly adjust them accordingly. During that one-year period Lagoon cut its usage by more than half, Keith Johnson, assistant city manager said.
Johnson said usage for commercial users was down from projections, especially for Lagoon. The amusement park used more than 21 million gallons of culinary water in 2011, compared to more than 50 million gallons the year before.
Water rates have been a touchy topic for years, with Lagoon and city officials at odds for more than a year before the new rates were implemented. The big question among city officials at the time was whether the city's residential customers had been subsidizing Lagoon.
City officials eventually had two separate studies done of the rates before adopting the new water fee.
Water rates for residential and commercial users were raised almost 40 percent as part of the 2010-11 fiscal year budget. The city had a separate rate for Lagoon.
In a letter to city officials in July 2011, Dave Freed, one of the co-owners of the amusement park, said his company had invested $19,000 in new equipment and staff time to implement a new system to monitor water usage.
He said Lagoon was paying $3.57 per 1,000 gallons of water used. He said the rate was disproportionately high as a result of what he termed an "unjustifiably high base rate" implemented in 2010.
He said the amusement park was being charged a $2,457 base rate meter charge a month, with only two of the park's four meters in use. He said other users were paying $18.25 a meter.
As part of the city's new commercial rate schedule, all users will be charged $2.12 per 1,000 gallons of culinary water used, but base rates will be established according to the size of the meters used by the business. The old rate was $2.60 per 1,000 gallons of water used.
Mayor Scott Harbertson estimated the new base rate will result in a 21 percent reduction of costs for the amusement park.
Andre Mecham, a Lagoon spokesman, wondered how the city had arrived at the base rate of $614.25 a month for 8-inch meters, and questioned some of the original language about how meter size would determine the base rate. Some of that language was corrected before the final vote.
Councilman Jim Talbot alluded to the contentious nature of the issue between the city and Lagoon during discussion about the new rates.
"No matter what we do, Lagoon is never happy," Talbot said of the rate discussion.
Harbertson, however, praised officials from Lagoon and said their reduction of water usage shows they are serious about addressing the issue. He said he is happy the new rate structure does not separate Lagoon from other commercial accounts, adding, "I like the fact we don't have to have a special category for Lagoon. I hated the fact we put Lagoon in a box and treated them differently."