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Latest sewer rate hike drops minimum MCF charge

By Jeff Gallatin

North Olmsted

City officials believe portions of the latest sewer rate increase can aid customers in more ways than one.

City Council was expected to formally pass at last night’s city council meeting the latest sewer rate increases, with rates going up for customers by 11.3 percent in 2012, 2013 and 2014. Current figures show the expected increases dropping to 6.1 percent in 2015, then 3 percent annually from 2016-19.

Administration and council officials noted the federal Environmental Protection Agency has mandated $44 million in capital replacement and upgrades at the North Olmsted wastewater treatment plant. The original rate study was done in 2007, with the latest increases coming from revised study figures in 2009 and 2010, along with a more defined cost projection of treatment plant and collection system improvements.

As part of the improvements, city officials have eliminated a minimum charge of 1 Mcf (1,000 cubic feet). The practice of having a minimum charge has drawn fire from residents in the past.

Mayor Kevin Kennedy said the city is trying to do what it can to minimize the financial impact of the increases in a tough economy.

“We know it’s hard to deal with right now for people,” he said. “But the EPA has told us that this has to get done,” he said. “As part of that, we’ve eliminated that minimum charge. That should help a lot of people. If they also utilize some water saving ideas, then they can definitely lessen the impact.”

Deadlines for getting the $11 million in collection system improvements is December 2012, with the $33 million in plant improvements deadline being December 2014.

North Olmsted Finance Director Carrie Copfer said the purpose of a rate study, as has been used to determine the rate increases, is to determine the appropriate rate to generate sufficient revenues to cover operating, maintenance and repair, debt service requirements, capital improvements and maintaining adequate reserves. The current study figures assume a 2.5 percent decrease in annual usage as part of the changes.

Officials said the rate increases must also be in place to pay for a federal loan to pay for the improvements.

“The rate increases the highest percentages the first few years as we need to reserve funds for 2015 when approximately $800,000 for the collection system debt first full year of repayment begins, then for 2016 where the plant debt service ($2.4 million) begins,” she said, “both while making the last two years of payment of the 1996 debt of $1.4 million each year.”

Copfer said North Olmsted rates remain higher than the Northeast Ohio Regional Sewer District until 2015, but that year, projections show North Olmsted’s becoming lower.

“Those who are in a NEORSD district also have a department that maintains a collection system and is based on a fee or paid for by property taxes in addition to the NEORSD rate. For North Olmsted residents that includes both.”

Copfer noted some Fairview Park and Olmsted Township customers pay based on a contractural arrangement, which will be amended to include corresponding rate increases to reflect their share of the joint usage.

Former city Finance Director Jim Burns has questioned some of the figures for the latest rate increases and whether they had the right data. Copfer has said the proper figures are included.

Council Finance Committee Chairman Paul Barker said Monday the rates will fulfill needs.

“We’ve had some questions about whether they are actually EPA-mandated and whether the figures are right,” he said. “These improvements are EPA-mandated, and we have to make them. The figures account for what we have to do. People will see improvements for what they get and are paying for.”

 

 

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