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RES-2011-034 Resolution to Amend Efland Sewer Rate Schedule
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RES-2011-034 Resolution to Amend Efland Sewer Rate Schedule
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Last modified
3/5/2019 12:06:26 PM
Creation date
4/6/2011 4:46:01 PM
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BOCC
Date
2/5/2011
Meeting Type
Regular Meeting
Document Type
Resolution
Agenda Item
8d
Document Relationships
Agenda - 04-05-2011 - 8d
(Linked To)
Path:
\Board of County Commissioners\BOCC Agendas\2010's\2011\Agenda - 04-05-2011
Minutes 04-05-2011
(Attachment)
Path:
\Board of County Commissioners\Minutes - Approved\2010's\2011
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Mebane does provide a useful benchmark for the rate structure. The City of Mebane's current <br />water and sewer rate schedule is provided at Attachment 3. <br />ANNUAL COMPARISONS <br />As shown in Attachment 2, the current rate customers in Efland pay for sewer consists of a <br />base charge of $10.16 and a commodity, or usage, charge of $8.82 per 1,000 gallons. This <br />rate is scheduled to increase in July 2011 to a base charge of $14.12 and a commodity charge <br />of $12.26 per 1,000 gallons. The scheduled rate change represents an increase of <br />approximately 40% compared to the current rate. To place this increase into context, the <br />increase in July 2009 and the increase in July 2010 were each 40% increases as well. The <br />sewer bill for someone using 5,000 gallons per month in fiscal year 2008-2009 (original rate, <br />before any increases) was $24.20. The current sewer bill for someone using 5,000 gallons per <br />month is $54.26. If the increase in July 2011 follows the currently approved schedule, the <br />sewer bill for someone using 5,000 gallons per month would increase to $75.42. <br />OPERATING FUND DEFICIT <br />It was suggested by Justice United that the Efland sewer rate be frozen at the current level until <br />an agreement can be reached with Mebane to accept the flow or some other solution is <br />developed to lower operating costs. Staff believes that freezing the rates is not the solution for <br />a number of reasons. First, the rates were frozen for the first twenty years of operation, which <br />has led to the need to implement such dramatic rate increases to bring the system back into <br />acceptable fiscal shape. Second, the costs to operate the system cannot be frozen, so the <br />system would become less financially stable as revenue stayed constant and operating costs <br />rose over time. Finally, even if the operating costs were to remain relatively stable over the next <br />few years, the system is currently operating with a revenue deficit of approximately $95,000 per <br />year in the operating budget. This means that the revenue collected based on the current rates <br />provides approximately 56% of the operating budget for the system, with the remainder of the <br />operating cost provided from the County General Fund. Since the revenue collected does not <br />provide enough money to cover the operating budget for the system, the General Fund must <br />also provide funds for any capital expenditures required by the Efland sewer system. <br />PROPOSAL <br />County staff does recognize, however, that continuing to follow the approved schedule of rate <br />increases would represent a hardship to the average Efland sewer customer who has already <br />experienced two 40% rate increases over the last two years. To lessen the burden of the <br />projected increases, yet continue to work towards good fiscal health for the system, staff <br />proposes the following alternative to the existing rate increase schedule. "Proposal 1" in <br />Attachment 1 is to hold the base charge at $10.16, and increase the commodity charge over <br />the next two years to equal Mebane's out-of-town rate, which is projected to be $12.50 per <br />1,000 gallons by fiscal year 2012-2013. <br />This would be accomplished in two steps. The first increase from $8.82 per 1,000 gallons to <br />$10.86 per 1,000 gallons would increase the commodity charge to equal the amount the County <br />is currently being charged by Hillsborough to treat the wastewater from Efland. The sewer bill <br />for someone using 5,000 gallons per month would increase from $54.26 to $64.46. This <br />increase represents roughly an 18% average increase to the total bill across all customers. The <br />second step would occur in July 2012 and would increase the commodity charge from $10.86 <br />per 1000 gallons to $12.50 per 1,000 gallons, which is the projected Mebane out-of-town sewer <br />usage rate at that time. For a sewer customer using 5,000 gallons per month, this would <br />increase a sewer bill from $64.46 to $72.66, or an average increase of 12% to the total bill <br />across all customers. Based on current budget projections, the increase to $12.50 per 1,000 <br />
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