Kennewick Irrigation District ratepayers can expect a 2.5 percent increase in assessments next year.
KID unanimously approved a 2015 budget Tuesday that included revenue from the higher preliminary 2015 assessments.
The operating budget is about $9.4 million. That is 6.7 percent more than this year’s revised budget of $8.8 million. The difference would be lower if not for several one-time expenses.
Some of the new expenses also relate to delivery of Yakima River water to wine grape growers on Red Mountain bear Benton City, including electricity and the only new position the irrigation district plans to add next year.
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Next year is the first year ratepayers will use the new irrigation system.
KID will receive new operating revenue next year from Red Mountain, said Colleen Storms, KID treasurer. Property owners also will start to pay back KID for the loan used to cover construction costs for the local improvement district.
Although the budget assumes a 2.5 percent increase to assessments, the KID board has yet to approve next year’s assessments. The board plans to vote on assessments in January.
The proposed rates mean property owners would pay $1 to $20 more for operations and maintenance, depending on the size of their property and whether the system is gravity or pressurized, according to KID documents.
In the past five years, KID assessments grew by about an average of 1.2 percent per year, officials said.
Storms said the proposed assessment increase is lower than it could have been because KID absorbed some of the anticipated cost increases from health insurance, liability insurance and electricity. The district made cuts to overtime, and employees will pay a higher share of their medical insurance costs.
KID officials also plan to use some of the irrigation district’s savings to pay one-time expenses. Storms said the savings KID has built up allows the agency to pay for these types of costs without increasing rates.
KID will use $297,000 from the risk management mitigation fund to cover the cost of two canal breaks in Finley this summer.
About $500,000 from the drought mitigation reserve fund will help buy automated canal gates, Storms said. About $205,000 from the realty reserve will help pay for financial software, she said.
Despite using about $1.9 million from reserves, KID’s budget calls for it to continue to add to its savings. The irrigation district anticipated bringing reserve funds from $10.5 million this year to $13.4 million at the end of next year, according to KID documents.
Planning to carry forward money each year helps KID replenish the risk funds, Storms said.
KID’s board also is expected to consider rate increases for KID’s two potable water systems, Lorayne J and Elliott Lake. Those customers have not had a rate increase for a long time, said Chuck Freeman, KID manager. KID staff plan to contact those property owners to discuss a rate increase.
While the costs of those systems increased, revenue has not, Storms said. Operating expenses are expected to exceed revenues this year, according to KID documents.