Subject:
Title
Public Hearing for FY2018-19 Water and Sewer Rates
Body
EXPLANATION AND SUMMARY:
In FY 2017-18, the Town selected Municipal & Financial Services Group (MFSG), under RPF 18-04, to perform a Water and Sewer Rate study. Goals of the study were to keep the system self-supporting, provide reserves for contingencies and required capital improvements, and keep water and sewer rates as low as possible over time. Additionally, the Town was able to benefit from MFSG's 40 years of experience and familiarity with the American Water Works Association's (AWWA) best practices.
MFSG's report focused on two critical components: properly addressing water and sewer infrastructure needs and providing rates that could cover increasing sewer costs. Additionally, the Town wanted to continue the block rate structure to encourage conservation.
A summary of key recommendations are as follows:
- maintain a minimum of 90 days of operating expenditures in cash
- use AWWA suggested equivalents for quarterly flat charges based on meter size for commercial customers (While residential service charges will increase, it will be under $3 a quarter in 2019. Commercial customers will see a bigger increase.)
- realign residential and commercial tiers so that about 50% of customers are at tier 1 rates, 30% fall into tier 2 rates for the excess over tier 1, and the remaining 20% fall into tier 3 rates for the excess over tiers 1 and 2 - another AWWA best practice. (For residential customers, this lowers tier limits. For commercial customers, it raises tier limits. This change benefits residential customers who use less than 16,000 gallons quarterly [the former tier 1 cutoff] as they will pay a lower rate for the first tier.)
- new proposed rates show a 3.5% increase in water rates and a 10% increase in sewer rates; service charges go up by 10% to 15% annually, mainly from commercial customers. (The industry standard goal for service charges is to ...
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