Village Council— One step closer to rate hikes
- Published: October 15, 2015
At its Oct. 5 meeting, Village Council took the first step toward passing legislation that would significantly increase villagers’ water and sewer rates in 2016, and could set the village on a course toward substantially higher rates for the foreseeable future.
If the legislation is passed, residents and businesses would see an immediate impact. Water rates would rise by 30 percent and sewer rates by 15 percent beginning Jan. 1, 2016.
As the legislation is currently formulated, the increase would affect the monthly consumption charge — the cost for actual usage, measured per 1,000 gallons. Monthly consumption charges are currently $5.77 per 1,000 gallons for water service and $5.70 for sewer. The increases set forth in the legislation would raise the water rate to $7.50, and the sewer rate to $6.56.
The increases were recommended by the Ohio Rural Community Assistance Program, or RCAP, an agency the Village commissioned last spring to perform a comprehensive rate analysis of water and sewer operations. The RCAP study recommended a raft of longterm increases to water and sewer rates to cover major capital upgrades, improve maintenance and save for future projects. The study’s results were presented to Council two weeks ago.
While the draft legislation raises consumption rates, it does not change the monthly “readiness for service” charge, a base fee that is gauged on water meter size. For virtually all residential users, the RFS charge is currently $6.80 for water and $11.80 for sewer. Higher RFS charges apply to users with larger meters, such as many businesses.
However, the RCAP study recommended hefty increases to the RFS charge in addition to the consumption charge increases. (The recommendations were to more than triple the water RFS, to $24.17, and nearly triple the sewer RFS, to $34.14.) Council members expressed strong reservations about implementing those increases in addition to rate hikes.
Consideration of any changes to the RFS charge will be part of Council’s discussion at the second reading of the legislation, slated for Oct. 19. The earliest Council could approve rate increases would be Nov. 2.
Taking the long view
The legislation heard at this week’s meeting pertains to water and sewer rate increases in 2016 only. However, Council members quickly took the long view.
“I think we should do the whole thing,” said Council Vice President Lori Askeland, referring to the RCAP study’s longterm recommendations. “I don’t feel it’s optional — these are expenses we’ve incurred.”
The RCAP study recommended raising water rates by 30 percent each year for three years, and sewer rates by 15 percent each year for four years. After that, the study recommends building in automatic annual increases of 2.25 percent for water and 3 percent for sewer for the remainder of a 10-year timeline.
Council members asked Village staff to redraft the single-year ordinances as multi-year legislation up to and perhaps exceeding a five-year time window. The redrafted legislation will be discussed at a second reading at Council’s next meeting.
“There’s a logic to making it harder to revoke [these increases],” said Askeland. If Council were to pass multi-year increases, future Councils could revoke the legislation. However, “they would have to actively decide to undo it,” she said. The study’s results are “rooted in a lot of data,” she added. “The next Council isn’t going to hear that data.”
Council President Karen Wintrow emphasized that major capital expenditures are driving the rate increases. Chief among these is the building of a new water treatment plant, expected to cost $5.3 million. The Village is currently receiving bids for that project. Already underway are loop completion and bottleneck elimination projects to improve the water distribution system, estimated to cost $1.5 million. And the past several years have seen major upgrades at the wastewater treatment plant and pump station.
“We’ve done some major projects and committed to a water treatment plant and now we have to pay for it,” said Wintrow.
While the rate increases are needed to cover these outlays, the RCAP study also highlighted historical shortfalls in budgeting for preventative and predictive maintenance and saving for capital improvements. So the increases are also needed to shift the Village’s budget focus to the future.
“We’ve played the opposite logic” for a long time, said Askeland. Rather than looking at what “everyone else is doing” and setting rates on that basis, we are “now looking at what it costs to maintain the system,” she said.
“This is new,” agreed Council member Gerald Simms. “We haven’t been doing it, and now we’re paying.”
Dean Pallotta, owner of Dino’s, voiced his concern that the increases would hurt village businesses.
“Businesses are spending a lot on water,” he said. Pallotta urged Council to consider other options for covering water and sewer costs, such as promoting economic development.
Wintrow noted that the growth of three major businesses in the village, plus a revitalized Antioch College, may boost water and sewer revenues going forward, potentially allowing future Councils to moderate rate increases.
“If funds are growing beyond what’s necessary, we can slow down,” she said.
Wintrow highlighted the expansion of the Yellow Springs Brewery, the growth of businesses at the 888 Dayton Street property and the construction of the 28-room Mills Park Hotel as positive parts of the picture.
Raising rates isn’t necessarily the only approach to covering costs. Both Askeland and Council member Brian Housh pointed out that property assessments are another option.
But Council members seemed resolved to pursue some version of the rate increases recommended by the RCAP study and set forth in the draft legislation. Council will hear a second reading of a multi-year version of the legislation on Oct. 19, and will discuss rate hikes as well as RCAP recommendations concerning RFS increases at that time. A third reading of the legislation is planned for Nov. 2.
Other Council items will be covered in the Oct. 15 issue of the News.