Village passes utility rate hikes
- Published: November 19, 2015
Yellow Springs residents can expect significantly higher utility rates in the new year. At its Nov. 2 meeting, Village Council voted 5–0 to raise water rates by 30 percent and sewer rates by 15 percent beginning on Jan. 1, 2016. The vote was the ordinance’s second and final reading.
But villagers’ rates will not just rise for a single year. The new ordinance puts into effect a five-year schedule of increases. At meetings earlier this fall, Council members argued for writing the legislation with a longer time horizon in order to begin to close the gap between customer revenues and system costs — and start to save more aggressively for maintenance and capital projects.
“We went a long time without rate increases,” said outgoing Vice President Lori Askeland at the Nov. 2 meeting. In the past five years, Council raised water rates each year by varying (though more modest) amounts, but those increases were “too little too late,” she added. Sewer rates were not increased at all during that time.
The new ordinance raises water rates by 30 percent each year for three years, followed by 2.25 percent annual increases for the following two years. The legislation raises sewer rates by 15 percent each year for four years, with a 3 percent rise in the last year of the five-year schedule.
As previously reported, these increases mean that villagers will see their water bill double in three years, from an average of roughly $30 monthly to roughly $60, according to figures presented at previous Council meetings. And average monthly sewer charges will increase by more than half over a four-year span, from around $37 monthly to around $65. (Estimates assume an average monthly consumption of 4,500 gallons.)
The rate hikes follow the recommendations of a Yellow Springs utility rate analysis conducted by Ohio’s Rural Community Assistance Program, or RCAP. The Village commissioned the study last spring, and Council members and Village staff heard the findings and recommendations at Council’s Sept. 21 work session.
One RCAP recommendation that Council members did not follow concerned sharply increasing the “readiness for service,” or RFS, charge. Per the legislation passed last week, RFS charges for water and sewer will remain at their current levels. This means that nearly all residential customers will continue to pay a base minimum charge of $6.80 for water and $11.80 for sewer in addition to consumption charges.
There were no public comments at the Nov. 2 meeting in response to the rate increases. During Council’s previous discussions, only one citizen, Dean Pallotta, owner of Dino’s, weighed in. Pallotta voiced concern about the impact of higher water rates on local businesses.
“Businesses are spending a lot on water,” he told Council at its Oct. 5 meeting.
According to the RCAP report, the Village needs to raise customer rates in order to pay for the construction of the new water plant, a project estimated at $5.3 million, as well as save for future capital improvements and maintenance of the system. The report notes that the Village’s “historical inability to save for future capital needs” has made customers “susceptible to large rate adjustments” in order to finance capital projects, such as the water plant.
The water plant project is financed through a combination of grants and loans. Only about $100,000 of the expense will be paid out in 2016, according to Village Assistant Manager/Finance Director Melissa Vanzant.
The Village budget has capital improvement funds for water and sewer. However, those funds have gone unfunded in recent years. In the 2016 budget, $25,000 is earmarked for the sewer capital improvement fund. No monies are being transferred into the water capital improvement fund.
The latest version of the 2016 water budget projects a $40,000 deficit (due to a portion of water plant consultant costs being posted in that year). The 2015 budget is on track to post a modest surplus. Budgets for the last couple of years have ended approximately $90,000 in the red.
The 2016 sewer budget projects a small surplus of just under $10,000. The 2015 budget will likely post a small surplus by year-end (despite projections of a deficit). The sewer budget was in the red in 2013 and 2014 by approximate amounts of $60,000 and $250,000, respectively.
As they enacted the five-year increases, Council members had their eye on the even longer term.
“It would be better to have a plan for 1 to 2 percent increases each year” after 2020, said Askeland. In the RCAP report, “automatic annual rate adjustments” of 2.25 percent for water and 3 percent for sewer were projected out to year 10. Council opted to enact five years of increases, rather than the full 10.
“I’m worried about institutional memory loss,” Askeland added. Council member Brian Housh shared her concern, and recommended Village staff set up a “best practices” folder for future Councils to provide context for rates discussions in year six and beyond.
Separate from the water and sewer rate increases, Council is also considering an 18 percent rise in electric rates in 2016, as well as a change in rate structure. The electric rate increase is reflected in the revenue projections in the 2016 electric budget. However, Council has not yet voted to enact any changes to customer electric charges.
In other Council business:
• Following the ACE Task Force public forum on Oct. 29, Council members signaled their readiness to make a decision regarding Yellow Springs’ participation in the Task Force. Council will take up the issue at its next meeting, Nov. 16, and intends to come to a decision at that time, according to President Karen Wintrow. Chief David Hale will address Council on the downside of withdrawing from ACE, and there will be an opportunity for further public comment.
• Council passed 5–0 a resolution outlining the need for a renewal of the five-year, 8.4 mill property tax levy, which generates about $700,000 annually for Village operations. The levy will go on the ballot in March of 2016.
• Council approved 5–0 the first readings of newly worded ordinances for the Village’s seven citizen commissions: Public Art (renamed Arts and Culture), Community Access Panel, Economic Sustainability, Energy Board, Library, Human Relations and Environmental. No substantive changes affecting commission function have been made. Council also voted to accept four new members onto the Economic Sustainability Commission, which is being reconstituted after a hiatus. That commission has room for two more members.
• A resolution identifying easement purchase priorities for the Village in collaboration with the Tecumseh Land Trust received Council’s unanimous approval. The priorities are: properties that are within the one- and five-year “time of travel” to Village wells; properties in the Jacoby Greenbelt that front directly on Dayton-Yellow Springs Road; other Jacoby Greenbelt properties; and the “Country Commons” properties east of Yellow Springs and Glen Helen.
• Council voted 5-0 to approve a contract with an outside firm, HD Supply, for installing remote electric meters at all residences in the village. The work will cost around $31,000. According to Village Manager Patti Bates, the firm should be finished with installation before Christmas. The remote-read meters will not mean a cut to Village staff, but will allow meters to be read every month rather than periodically. In response to one citizen’s concern about possible radiation exposure from the meters, Council agreed to look into the matter.