Sewer rate changes to address recurring revenue shortfall

March 12, 2014

In order to address a recurring shortfall in revenue and fairly assess annual costs based on actual use, the Town Council recently approved a number of changes to its sewer rate structure and billing methods beginning in July.
In a press release from the town manager’s office intended to clear up confusion among residents, the town explained the current system relies exclusively on water used during winter months to calculate bills that estimate customers’ full-year sewer use. This approach resulted in unfair, biased billing that was consistently unable to keep pace with the costs of the sewer system and triggered frequent, dramatic rate increases every couple of years, explained the release.
The new rate structure, the town release said, will provide an equitable solution to satisfy the revenue requirements and more evenly distribute associated costs among ratepayers, based on actual use, rather than unfairly burdening a select few. The rate change will capture an additional 16 percent of the required revenue, which is currently not being collected.
Residents who use private wells and private septic systems and currently pay no sewer bill will see no change, said the town.
As a reminder, the town explained, the annual bills for 2013-2014 residents will receive in April, May and June of this year will be based on the old system.
For customers using public water and public sewer, the town’s release explained that beginning with the new fiscal year, residents on public water and sewer can expect to receive quarterly bills that more accurately reflect their actual sewer usage.
Starting in July 2014, the town explained, residents using public water and sewer will receive a quarterly bill with two parts: a fixed rate and a variable rate. The fixed rate will be assessed in one of three separate categories: residential, commercial, or industrial.  The variable rate will be assessed based on actual water usage.
In order to close the current funding shortage, the average current rate will increase by 10 percent.
The residential annual fixed rate is $180 per household, billed at $45.00 per quarter, the release said. The variable rate was reduced from $4.33 per 100 cubic feet (CF) to $3 per100 CF. The commercial annual fixed rate is $250 per establishment, billed at $62.50 per quarter. The variable rate was reduced from $4.33 per 100 cubic feet to $4.20 per 100 CF. The industrial annual fixed rate is $250 per establishment, billed at $62.50 per quarter. The variable rate was reduced from $4.33 per100 cubic feet (CF) to $3.30 per 100 CF.
Variable rates will be calculated using the same water meter readings used by the water department to calculate its quarterly water bills, said the release. In addition to breaking down customers into residential, commercial, and industrial users, the release explained, the new structure also distinguishes between customers serviced by public water and private wells.
Customers using private wells and public sewer will be charged an annual flat rate based on the type of use, explained the town. These customers will not be assessed a variable rate based on consumption.
The residential annual fixed well rate is $400 per household, billed at $100 per quarter. The commercial annual fixed well rate is $650 per establishment, billed at $162.50 per quarter. The industrial annual fixed well rate is $700 per establishment, billed at $175 per quarter, the release explained.
Should they chose, the town explained, customers using private wells may elect to install a water meter on their well and be charged the same rates (both variable and fixed) as metered customers who use public water and public sewer. Customers who irrigate or use significant quantities of non-sewered water may elect to install a second meter that will subtract the water used for irrigation but didn’t enter the town’s sewer system from their sewer bill, said the release. In each case the cost to purchase and install the second meter will be the customer’s responsibility, the town said.
Low-income senior citizens who are currently income qualified by the Assessor’s Office to receive lower tax rates will be eligible to receive lower fixed well rates of $150 annually billed at $37.50 per quarter for an individual and $300 (annually), billed at $75 per quarter for a couple, said the release.
The annual income thresholds currently are $34,100 for an individual and $41,600 for a couple.
Low-income customers who are not senior citizens may appeal the rate increase to the town manager, said the release.

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