Winfield Commission to discuss water rates

The City of Winfield is looking at ways to increase revenue for its water utility fund, and higher rates for water customer could be on the horizon.

City commissioners and staff will discuss the issue at their Thursday work session.

According to a memo from Winfield City Manager Jeremy Willmoth, the current water fund does not bring in enough revenue to keep up with expenses and growing capital concerns.

Water utility revenues are mostly a combination of meter charges and volume, or usage, charges. For expenses, 70 percent goes to salaries, benefits and other fixed costs. Costs that fluctuate with demands make up the other 30 percent.

Total revenues in 2016 were $2.3 million, with expenses of $2.5 million, leaving a deficit of a little less than $200,000. Figures provided for 2015 and 2014 show similar revenues, expenses and deficits in those years.

While the city sells roughly the same amount of water today as it did in 2008, the costs to produce and distribute the water have gone up considerably, leading to the revenue shortage.

The city is now trying to resolve the revenue shortage, while also addressing the fixed cost/variable costs dilemma.

“To be clear — we will never develop a rate structure that produces 70 percent of the revenues on fixed cost, as that would unfairly burden those on a fixed income,” Willmoth’s memo states. “However, staff believes we do need to make adjustments to ensure that a larger portion of our revenue is fixed from year to year, rather than solely dependent on volume of sales.”

(Read more: The Arkansas City Traveler)