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Water rate may increase in Moorhead

Water prices in Moorhead will increase by 10 percent in the next two years if the suggestions made in a study of the city's water rates are followed.

Water prices in Moorhead will increase by 10 percent in the next two years if the suggestions made in a study of the city's water rates are followed.

The price hikes are needed to prevent against a projected depletion of cash reserves and would more accurately spread costs among different classes of customers, said Tim Miller, a senior rate analyst with Missouri River Energy Services, the South Dakota company hired to conduct the $10,000 study.

Members of the board governing Moorhead Public Service, the city's nonprofit utility company, heard the results Monday.

Miller told them during his presentation of the study that if rates do not increase, the utility's cash reserves will have a $286,000 deficit by 2006.

If the suggested increases are approved, reserves will be at $1.3 million by 2008, Miller said.

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The study also showed that some classes of customers were not paying their fair share.

At the top of that list are commercial customers, responsible for 17.1 percent of the costs of providing water service but at 14.9 percent of the revenue collected.

The study stated that including a 10 percent increase across the board to bolster cash reserves, commercial rates would need to increase by 26.3 percent to pay for the appropriate portion of services.

Dilworth, which will pipe in 36 percent of its water from Moorhead in 2004, would require a similar increase of 16.9 percent to fairly account for the amount of water the neighboring city uses.

Apartment customers are at the other extreme. The study suggested a 0.4 percent decrease in water rates for apartments, including the 10 percent overall increase.

The study suggests an 18.8 increase in commercial rates over the next two years, not a 26.3 percent hike, and a 4 percent increase in apartment rates over the same period.

General Manager Bill Schwandt said the study of service costs was the first done since 1995.

The board will discuss the rate increases at their Oct. 12 meeting. A public hearing on the issue will be held Nov. 9. Board members will make a final decision on the rate changes at their Dec. 14 meeting, Schwandt said.

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Readers can reach Forum reporter Dave Roepke at (701) 241-5535

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