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S.L. MAY RAISE WATER RATES 15% TO REPAIR OLD SYSTEM

Salt Lake City residents may soon face the first of several water rate increases necessary to fund $50 million in repairs to the city's elderly water system.

The Salt Lake City Council is considering a 15 percent increase in water rates this year to partially fund a $5 million bond.The city needs to spend $5 million immediately to repair the buckling roof on the 1500 East Reservoir and add needed chemicals to the drinking water treated at the Big Cottonwood Water Treatment Plant. Both the reservoir and treatment plant also need repairs to help them withstand an earthquake.

The city must spend another $45 million over the next five years to salvage dams, aqueducts and treatment plants that haven't been upgraded since the 1950s.

The news stunned and angered the City Council. The council has been telling the public the city has millions of dollars in surplus, said council member Stuart Reid. "The truth of the matter is we are in debt up to here," Reid said, raising his hand above his head. "The public has to understand that. If they don't and we come traipsing in here with a 15 percent increase, they will say `What are you talking about?' We have to stop the double-talk and tell the public the truth."

The council decided Thursday night to delay the sale of the $5 million bond until it could hold a hearing on the possible rate increase. The $5 million was part of an $18 million bond the city planned to sell June 11. But a public hearing cannot be scheduled in time for that bond sale.

City water officials asked the council to authorize the June 11 sale for the full $18 million. However, several council members balked. "We are trying to figure out a way right now to short-circuit the public process and raise everyone's rates. . . . I won't participate in that," Reid said.

Instead, the council will hold a hearing possibly in July and open the 1996-97 budget if it decides to increase water rates.

The last-minute crisis arose after the council recently adopted a policy requiring the storm water, sewer and culinary water budgets to stand on their own, without using one to subsidize the other. Before that new policy, city officials planned to use money from the sewer fund to pay the $300,000 debt service on the $5 million bond.

"If we don't violate our stand-alone policy, we do have to raise rates," said Council Chairman Keith Christensen.

If the council adopts the recommended 15 percent increase, the average annual water bill of $180 for a household would jump to $207.