A fixed monthly water and sewer rate with additional charges based on usage was recommended to village council last week as the solution to dwindling utility funds.
Wellington officials voted to move forward with the drafting of an ordinance that is expected to be read for the first time in November. That ordinance will call for a reexamination of utility rates every October and will lay out plans to keep water and sewer pipes in repair.
For water service, the rate structure is expected to mandate a $2 monthly fixed rate for 5/8-inch meters within village corporation limits, $3 for 3/4-inch meters, $5 for one-inch meters, and $10 for 1.5-inch meters. For meters outside those limits, 5/8-inch will earn a $3 charge, 3/4-inch gets $4.50, one-inch will cost $7.50, and 1.5-inch $15.
Usage rates per gallon will increase by 5 percent in 2018 and 2019 and another 3.5 percent in 2020.
Residents currently pay $7.75 for every 1,000 gallons of water used and a flat rate of $3.50 per month for storm sewer amenities.
That storm sewer rate will also increase to $6 per month. However, that rate can rise if a property contains more than 2,900 square-feet of structures that cause water runoff such as roofs and pavement.
The fixed water rates are designed to create yearly revenues of $61,638, part of total projected water revenue of $960,638 in 2018, $1,004,738 in 2019, and $1,037,152 in both 2020 and 2021.
Those totals would generate budget surpluses of 31 percent next year, 28 percent in 2019, and 26 percent the final two years of the plan. Surpluses are needed to cover unexpected costs, such as recovering from catastrophic events such as fires or burst mains.
Sewer service increases are expected to create $145,740 in yearly revenue from 2018 to 2020. Total projected sewer revenue for next year sits at $1,044,240 and $1,110,240 in both 2019 and 2020 — respective surpluses of 16.5, 20, and 25 percent.
The Poggemeyer Design Group was tasked with examining the village’s rates in January to see if they were sufficient in covering costs. According to officials, it was the first time an outside source had looked at the rates in more than 10 years.
The study determined an increase is necessary to offset further deficit spending and to create a 25 to 40 percent surplus in the funds, which village officials say is needed to cover rising costs and in the event of infrastructure needing repairs.
In 2014, council approved a seven percent increase in charges for water use and another four percent in 2016.
Village manager Steve Dupee said the combination of a fixed rate and usage charge was the best option because a pure fixed rate wasn’t feasible for customers who use less water.
“This plan recognizes that both utility operations have fixed costs irrespective of consumption,” he said. “We felt it was important to recognize that in our rate structure. The fixes fees only create very small revenues for both utilities. It’s a first step for us into creating a fixed rate mechanism in our rate structure.”
Resident Jessica Janka spoke out against a pure fixed rate, saying it would throw off delicate monthly budgeting for seniors and any homes with lower consumption. She asked that the village continue to base charges solely on usage.
“I have senior citizens all around me,” she said. “Has anyone thought how this will affect them? I understand your budget concerns and the buffer you need for infrastructure concerns. Why can’t we have a low-usage family pay one fixed amount and a high-usage family pays another amount? For me to pay the same amount of a family of six, eight, or 10 is ridiculous.”
“I assure you we’ve beat ourselves over the head on this,” responded councilman Gene Hartman, who has swung from favoring a fixed rate to a mixed solution “because it leaves some control in the customer’s hands while everyone pays a little piece.”
Village water superintendent Mark Rosemark said higher water rates will help immensely in covering department improvements that will be needed in the coming years.
“Our unaccounted-for water is something we’re always trying to contend with and is still above 20 percent,” he said. “We’re going to have to spend money to do a better job of finding where this water is going. The target rate for water loss is around 15 percent. It’s definitely a significant expense going forward.”
Dupee said examining rates on a yearly basis will help avoid another drastic overhaul in the future.
“We need to be proactive in making recommendations to council about our rates and making sure they cover costs,” he said. “I don’t think we’re going to do an increase every year. An annual rate review is something we planned on doing anyway, but I think council felt more comfortable including wording for that in this new ordinance.”
Jonathan Delozier can be reached at 440-647-3171 or @DelozierNews on Twitter.