03-09-2016 Additions Packet - Laserfiche WebLink

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Sewer The 2015 Sewer Utility Fund budgeted a loss of $52,520. The projected 2015 results yield a surplus of $22,410. In reviewing rate comparisons, staff believes our minimum sewer charge is too high for lower volume users. In 2014, we reduced our minimum sewer charge from $55 per quarter to $50. We were able to do that given the dramatic reduction in treatment costs paid to Metropolitan Environmental Services at that time. Currently, the $50 minimum has covered usage up to 15,000 gallons based on winter quarter water usage. Users of 6,000 gallons are paying $8.33per 1,000 gallons of sewer usage versus our rate of $3.58 for users of over 15,000 gallons. That disparity is seems too high. Staff is also recommending that we add/clarify some other situations. They are: 1. Winter quarter water usage is the basis for sewer billings for all residential properties. Staff is recommending that properties with over four units will have sewer charges based on each quarter’s water usage; subject to a minimum charge based on usage of 8,000 gallons per quarter, per unit. The rational for this is the larger complexes all have deduct meters for irrigation uses. Therefore, high water usage would mean high sewer usage also. Another factor is in looking at usage by quarter for larger complexes, a number of them have lower water usage in subsequent quarters versus the winter quarter. (See Water Usage Analysis Chart attached) 2. Sewer only accounts with private wells will remain at the $50 per quarter minimum. The reasoning for this is we have no idea of sewer usage given no meter readings exist. In many cases actual sewer flows could result in higher charges than $50. 3. Sewer only billing accounts connected to a municipal water supply (VH apartments on Count Road D) will have their minimum increased to $55 per quarter if no water meter readings are supplied. In this case, VH has decided not to provide us with water usage amounts. In our own research, we learned that they would be using more than our 8,000 gallon minimum assumption. This charge is more representative of actual usage that was observed at the affected complexes. Staff has undertaken an analysis of our sewer rates and usage to evaluate changes in our rate structure. Based on this review, here are the key factors for your consideration: • We need to generate about $60,000 to $70,000 of new revenue based on 2016 projections. • If we keep our same rate structure of a $50 minimum, but increase the per 1,000 gallon rate from 3.58 to 3.95 or just over 10%, we generate about $64,000 in new revenue. All users of 13,000 or less gallons will see no increase in rates (this covers the vast majority of our residential users) and the highest impact would be to 15,000 gallon users who would see a 19% increase. (That is due to the minimum gallons falling from 15,000 to 13,000 which gives 2,000 gallons of usage at the per gallon rate that did not previously exist. The total increase to this volume user equals $18.70 per quarter. • If we simply lowered the minimum charge to $45 per quarter and increased the rate to $4.00 per 1,000 gallons, we only generate about $2,100 of additional revenue for the year. While this lowers the number of gallons covered by the minimum from 15,000 to 11,000, it negatively impacts the revenue generation because so many customers are within this range. This results in too great of a shift between users across the range of customers. 8