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How Utah pays for water use and what we can learn

How Utah pays for water use and what we can learn

(Jeffrey D. Allred, KSL)



This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.

SALT LAKE CITY — Grappling with the prospect of a continued population explosion and cycles of prolonged drought, Utah’s water masters are up to no easy task in the future when it comes to divvying out the precious resource.

Against that backdrop, the Utah Foundation released the report “High and Dry” on Tuesday, examining water supply, management and how water is paid for in the state.

The report is the first in the “Paying for Water” series by the foundation, which took a deep dive into the complexities of water management spanning 308 public water suppliers across Utah.

Data compiled in the report builds on the growing and robust debate over the extent to which property tax revenues play in the development, funding and delivery of water.

“Water providers nationally take varying approaches to paying their bills,” Utah Foundation President Peter Reichard said. “But the real question is not whether Utah water providers are unusual, but rather whether the approaches they take are best suited to the needs of our state.”

The report notes most water providers, particularly cities, do not use property taxes to support water service operations. However, it said, some retail water providers purchase water from a wholesaler that does collect property taxes for operational purposes.

“This has the effect of lowering the water rates for retail providers’ customers, even though the retailer itself does not collect property taxes,” the report said.

As a result of that relationship between wholesale and retail water providers, the report said more than 90% of Utahns likely pay lower water rates than they would otherwise because they live within a jurisdiction of a water provider — either wholesaler or retailer — that relies on property taxes.

Only 20% of Utahns live in the jurisdiction of just one water provider, adding nuances to a system in which historically, property taxes, impact fees and water rates all play strong roles in how residents pay for water.

The property tax role in water prices, however, has led to the criticism by groups like the Utah Rivers Council that argue it is a subsidy that keeps rates artificially low.

The advocacy group has long maintained that if residents were to pay the “true cost” of water, consumption would go down and negate building large, expensive water delivery projects.

Utah Foundation did note an analysis released in 2016 that looked at water use data for eight Western metropolitan areas, including most of Salt Lake County. The probe found that Salt Lake County had the third highest use per capita among those population centers, behind the Salton Sea Basin in Southern California and the Las Vegas region.

Of the more than 5 million acre-feet Utahns divert for water use, less than 3 million acre-feet of water is consumed, meaning a significant portion is reused by being treated and put back in the system.

Just 20% of the total diverted water is distributed through public utility systems, and of this, residential users consume more than two-thirds, using most it for outdoor purposes.

Criticism of management of Utah’s water resources, stoked by a series of legislative audits, led to more stringent reporting requirements by water providers and mandatory secondary water metering on new construction after April 2020.

Some cities and providers have already moved to voluntary metering, and the Utah Foundation predicts as density increases along the Wasatch Front, there will be less surface area requiring outdoor water and overall household consumption will decrease.

The foundation notes that a survey by the U.S. Governmental Accountability Office asked state water managers whether they expected local, regional or statewide water shortages within the next 10 years if there are average water conditions.

The report noted that Utah was one of five states — and the only state in the West — to report it expected no shortages within 10 years in both the 2003 and 2013 surveys.

“There may not be a one-size-fits-all approach in Utah,” the report said. “Utah’s 308 water providers vary widely in their tiered rate structures, size and funding mechanisms. Per-capita water use also varies widely, depending on climate, geography and community characteristics.”

On the same day the foundation released its report, the Utah Division of Water Resources announced it is opening a 30-day comment period for a first-ever region-by-region conservation goal for municipal and industrial water use.

The draft plan, which is open to comment through Sept. 25, is based on Utah’s diverse geography and specific populations in nine regions that include the Bear River, Central Utah, the Wasatch Front and the eastern Utah region.

To formulate the new water conservation goals, the Division of Water Resources gathered public input, conducted a survey and hosted eight open houses across the state. A team then worked with a third-party consultant to provide input on the goals.

The division posted the report on its website and an opportunity to provide comment.

Amy Joi O'Donoghue

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