Council to Consider New Water and Sewer Rate Structure
For years, the Homer City Council has struggled with what to do about water and sewer rates, attempting to ride a fine line between keeping rates down and ensuring that there is enough revenue to pay for the system. The council is considering a new plan that would overhaul the rate structure in an attempt to make it simpler and more adaptable in the future.
Last year, the council established the seven-member Water and Sewer Rate Task Force and asked the group to review the city’s current rate structure and come up with a new one for 2013.
Homer Mayor Beth Wythe is a member of the committee. She presented its findings at a city council work session Monday afternoon.
She said the task force examined several different types of rate models and graded them – on a scale of low to satisfactory to high – on a number of different criteria, including fairness, understandability and revenue stability.
Wythe said the task force settled on a model known as a “uniform rate model.”
"As far as consumer happiness and fairness ... that format was considered to be the best option," said Wythe.
The benefit of the uniform rate model, said Wythe, is that it is easy to administer, it removes multi-tenant charges and it encourages water conservation.
There are two numbers that are important to the discussion. The first is $1.3 million dollars. That’s the amount of money the city will need to recoup from water users in 2014 to offset the cost of the system. The second is 117 million gallons, the amount of water the task force is estimating will be used next year.
Wythe said that when you divide the first number by the second, what you get is a per gallon rate that will ensure the overall water system is paid for.
"And that came up to .011 (cents) per gallon," she said.
Just over a penny a gallon. When that rate is combined with an $18-dollar Metered Service Fee, Wythe says most average residential customers would actually see a small reduction in their monthly bills.
The model for the sewer rates is similar, with the estimated cost offset by the estimated usage. Most customers would pay a rate of 1.3 cents per gallon under the proposed plan.
So, for a customer using 1,033 gallons per month, the combined water and sewer rate would be just over $100.
Wythe says the new rate structure should be easier to use and adjust for future budgets and should be easier for customers to understand.
"What the consumer is going to see is if I use a gallon of water, I'm going to pay 1.3 cents for that gallon of water and I'm going to pay $18 a month for the privilege of having that water delivered to my home," said Wythe.
Wythe said that one thing the task force learned pretty quickly is that Homer’s water and sewer system is unlike those of similar-sized communities. Some of the issues include the lack of density in the system, the water treatment plant's location at the top of the Homer bluff and the cost of running the city's "state of the art" water facilities.
The bright side of that, said Wythe, is that Homer’s water is clean and the city has not – unlike some other communities – had trouble with meeting water quality standards.
Another long-standing problem with Homer’s water and sewer system has been in-filling – or the number of homes and business that are – or are not – connected to the more than 50 miles of pipe that stretch across the city.
City council member Beau Burgess is also a member of the task force. He said he would like the city council to address the in-filling issue in the future, as well as develop a better plan for servicing new subdivisions.
The council will be tackling the water and sewer rate issue in the coming months. It faces a July 1st deadline to finalize a new rate structure.