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Last updateTue, 04 Nov 2014 9pm

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Water & sewer rates raised

Water & sewer rates raised

The King George Service Authority Board of Directors was unanimous last week in a vote to raise water and sewer rates as proposed two months ago. The rate increases of five percent for water and 10 percent for sewer usage will be reflected in the July billing. 

The new rates also increase charges for debt service by the same percentages, along with a five-percent increase for new service connections. None of the Supervisors were happy to raise rates, but all saw the necessity to cover costs. 

The Service Authority’s 2012-13 total budget was set at $4,357,780. The rate increase reflects higher costs for chemicals for testing and treatment, fuel for vehicles, and the other rising costs of doing business. It also carries forward the cost of a two percent mid-year pay raise that was granted this past January 2012, along with a state-mandated one percent increase for all employees to offset their required increase in payments to the Virginia Retirement System effective July 1. 

It was also announced at the June 26 meeting that the Service Authority budget is projected to operate in the black for the outgoing fiscal year, unprecedented without county fund transfers as in the past. That would indicate that the current rate structure is so far successful, since the idea is to get the Service Authority self sufficient. 

The current rate structure was put into place three years ago. It was devised by Davenport & Associates to include gradual annual increases in water and sewer rates and fees, along with debt restructuring to save money on interest payments.  

FOUR COMMENTS FROM PUBLIC

The action followed a public hearing with four people speaking, all questioning the action. They were David Greenhalgh, Bob Lowery, Heath Taylor and Monique Winslow. 

NEW RATES FOR 2012-13

Residential bills for customers with both water and sewer service using up to 5,000 gallons per two-month billing period will go up by $8.58 every two months. That minimum bi-monthly bill for water and sewer will go from $104.03 to $112.61.

An ‘average’ bi-monthly residential bill for both water and sewer service will go from $213.22 to $231.00, which is an eight-percent increase. That ‘average bill’ is based on a usage of 13,750 gallons over a two-month billing period.

WATER    The usage rates for water will increase from $3.87 to $4.06 per 1,000 gallons for a 5,000-gallon minimum usage during each two-month use and billing cycle. The flat fee for debt service for water will go from $16.54 to $17.36. The minimum bill for water-only customers for 5,000 gallons will increase from $35.89 to $37.66 for two months of service.

SEWER    The usage rates for sewer will go from $8.61 to $9.47 per 1,000 gallons up to 5,000-gallons. The flat fee for debt service for sewer is going up from $25.09 to $27.60. The increases result in two-month bills going from $68.14 to $74.95 for 5000 gallon minimum usage for sewer-only. 

FUTURE RATE RESTRUCTURING PROPOSED

General Manager Chris Thomas talked about a proposed rate restructuring that will be computer-modeled in parallel alongside actual upcoming billings and usage for the coming year to verify if the proposed structure would raise enough revenue to support the costs of operations. 

It’s possible that the real-time modeling of the proposed water rate restructuring might not result in accurate results, since customer usage could change under a different rate structure once it goes into effect. 

That’s because mid- and high-use customers could decide to conserve their water consumption when they see their first bills under a different rate structure, which would put a premium on users of larger amounts of water. 

There is also a proposal to restructure the rates for sewer usage, which would require significantly higher rates, in part to make up for a proposed fixed bi-monthly charge due to a possible cap on usage rates, suggested to be set at the winter water use level for each household.

The future sewer rates have been preliminarily proposed to go up 15 percent in each of the first three years of implementation to reach a break-even level for sewer operations. 

That was discussed at a meeting April 18 with results of a rate study by Municipal & Financial Services Group (MFSG), with an examination of current and future forecasts for operations and maintenance costs, alongside comparisons with rates for nearby localities.

The study included an in-depth look at actual 2010-11 customer usage and charges, current year budgeted operating and maintenance expenses, the existing debt repayment schedule, five-year Capital Improvement Plan, along with projections for personnel expenses based on state regulations and a variety of other pertinent indices. 

Whether rates are restructured or not, they are still expected to continue to go up about three percent each year to cover the expected increase in costs for electricity, chemicals, gasoline and personnel. 

PROPOSED TIERED WATER RATES WITH WINTER CAP FOR SEWER BILLING

New Dahlgren Supervisor Ruby Brabo has led a charge to change the way water and sewer customers are charged for sewer usage based on their amount of water used. Only water usage is metered, with sewer usage based on water metering. That means that sewer charges include the water used for such things as washing cars and watering lawns and gardens.

That idea is proposed to be coupled with a three-tiered system that would charge higher rates for those using more water. That suggestion would provide a lower rate per 1,000 gallons for those customers who use up to 6,000 gallons per two-month billing period, which represent about 35 percent of customers.

Under this scenario, the study indicates that low-end water users could see lower bills than now. 

The recommendation includes charging one rate until 6,000 gallons, then a higher rate charge over that usage.

A mid-range charge would be set for use between 6,000 - 20,000 gallons, which is about 59 percent of customers. The high-use customers using 20,000 gallons per billing period, about six percent of customers, would be charged the highest rates per 1,000 over 20,000 gallons. 

As noted, the proposed tiered rate structure under consideration would also cap each household’s sewer rate at its previous winter usage rate for water, but significantly increase the rates for sewer usage. 

SERVICE AUTHORITY FACTS

The King George Service Authority is a small enterprise that owns and operates 12 water systems and five wastewater systems with about 3,850 customers, including both residential and commercial. About half the customers have both water and sewer service, with the rest water-only accounts and only a few sewer-only customers. It does not benefit from the economies of scale advantages provided to larger systems. 

It was formed in 1992 when the county’s separate sanitary systems were united. At the same time, private water systems were purchased to meet the demands of state regulations for Virginia’s evolving standards required for community water systems.

 

 

Phyllis Cook

 

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