Possible water and sewer rate adjustments were discussed at a special New Philadelphia City Council meeting held Wednesday, April 7, 2010. By city ordinance, the city’s Service Director is mandated to recommend to City Council changes in the rate structures for water and sewer usage within the city. As the first step to this year’s recommendation, the City Administration in last night’s special meeting, sponsored two presentations to this end.
A presentation by Jeannette Wierzbicki, of W. E. Qiocksall and Associates, a local engineering and consultant firm, provided an overview of current water and sewer rate policies as well as recommendations concerning rate increases for the future. Wierzbicki, reporting on water usage and revenues for last year, 2009, brought some interesting facts to light. There are, according to her report, 8,119 users of city water to whom charges are made. If you check your water bill, you will notice that you are charged by the cubic footage of water you use. If you are interested, there are 7.481 gallons in one cubic foot. Current rates are charged on a block usage basis, for example, 0 to 400 cubic feet, 500 to 700 cubic feet, 800 to 2000 cubic feet, and so on.
Using Wierzbicki’s figures, the majority of water users in the city, 77%, fall into the 0 to 700 cubic foot level of consumption, and pay 48% of the revenue collected by the water department. Interestingly enough, 38 users of city water, 0.05% of the total, use 21% of the water for which charges are made, but pay only 14% of the total revenue collected by the water department. Sewer charges are based on water consumption, and the charges are similar, the same percentages apply.
The Quicksall group made three recommendations. The first was to make no changes to the current billing system and keep the current structure, which decreases the charge per cubic foot as water and sewer use increases. The second was to keep the current system with some modifications. Everyone would pay a minimum bill but then pay a water use charge, depending on how much water was used, on the top of that. The third recommendation was that everyone pay a minimum charge regardless of usage, plus a charge based on the actual cost to produce the amount of water used.
According to Wierzbicki, the advantage of the second option is that the minimum fee would remain constant and water charges would be based on a sliding fee per cubic foot based on the amount of water used; the higher the usage, the lower the cost per cubic foot.. With the minimum fee was based the fixed costs, wages, benefits and other expenses which will not change regardless of how much water is used, the water department could meet its expenses, regardless of consumption. Mid-range users would bear the brunt of the increase while low end users, those less than 500 cubic feet, would not experience a cost increase while high end users would experience a decrease in cost.
The third option, Wierzbicki’s recommendation, would charge a common minimum rate for water and sewer, with a set cost per cubic foot of water used. The minimum rate would be determined as in the second option, based on fixed costs. The result of such a structure would increase the costs to the larger user while decreasing the costs to the mid range user which makes up about fifty percent of the cities water customers.
No decision was made by City Council at this meeting on water rates, rather the design of the meeting was to provide Council members with background information on revenues, expenses, and alternatives, so they may make educated decisions on water revenue questions in the future.
A second presentation, made by Dr. Timothy Wolfe, a chemist from MWH, an engineering and consultant firm from Columbus, Ohio, concerned the scaling problem being experienced by consumers of New Philadelphia water. Wolfe explained that while the scaling problem was major concern, not only to the people of the city but to the water department as well, the problem was one of economics, not health. Wolfe stated that the present system used to treat water in New Philadelphia, does so with good results as far as purification is concerned, but during the process decreases the amount of oxygen in the treated water. While this does not affect the water as far as human consumption or use is concerned, it does decrease the ability of the water to hold the chemicals which cause the scaling problem the city is experiencing. The solution, which Wolfe said would cure the problem, is the installation of equipment which would add carbon dioxide to the water, replacing the oxygen lost in the purification process.
Mr. Ricklic, City Water Superintendent, told council members that scaling in water meters was costing the city large amounts of revenue as scaling causes them to report lower water usage than is actually used. When asked for an estimate of what the loss might be Ricklic did not provide a figure but said meters that had been tested have shown up to a 50% error. The cost of the equipment to prevent the scaling problem was not available, but estimates from Wolfe and Ricklic ranged from “a couple of hundred thousand” to “somewhere around half a million.”
The unanswered question, the important, overriding question, is how is the equipment necessary to correct the scaling problem going to be paid for? Revenues are down, unemployment is up, and the depression shows no signs of improving in the foreseeable future. This was not covered in either presentation, nor should it have been. It is the responsibility of the Administration, and City Council, to seriously address the financial issues the City faces before any such legislation is considered.
Both presentations were worthwhile and should have provided council members with the information they need to understand the proposal for water and sewer rate adjustments in the near future. The Administration was well represented before Council by Ms. Wierzbicki and Dr. Wolfe.
A presentation by Jeannette Wierzbicki, of W. E. Qiocksall and Associates, a local engineering and consultant firm, provided an overview of current water and sewer rate policies as well as recommendations concerning rate increases for the future. Wierzbicki, reporting on water usage and revenues for last year, 2009, brought some interesting facts to light. There are, according to her report, 8,119 users of city water to whom charges are made. If you check your water bill, you will notice that you are charged by the cubic footage of water you use. If you are interested, there are 7.481 gallons in one cubic foot. Current rates are charged on a block usage basis, for example, 0 to 400 cubic feet, 500 to 700 cubic feet, 800 to 2000 cubic feet, and so on.
Using Wierzbicki’s figures, the majority of water users in the city, 77%, fall into the 0 to 700 cubic foot level of consumption, and pay 48% of the revenue collected by the water department. Interestingly enough, 38 users of city water, 0.05% of the total, use 21% of the water for which charges are made, but pay only 14% of the total revenue collected by the water department. Sewer charges are based on water consumption, and the charges are similar, the same percentages apply.
The Quicksall group made three recommendations. The first was to make no changes to the current billing system and keep the current structure, which decreases the charge per cubic foot as water and sewer use increases. The second was to keep the current system with some modifications. Everyone would pay a minimum bill but then pay a water use charge, depending on how much water was used, on the top of that. The third recommendation was that everyone pay a minimum charge regardless of usage, plus a charge based on the actual cost to produce the amount of water used.
According to Wierzbicki, the advantage of the second option is that the minimum fee would remain constant and water charges would be based on a sliding fee per cubic foot based on the amount of water used; the higher the usage, the lower the cost per cubic foot.. With the minimum fee was based the fixed costs, wages, benefits and other expenses which will not change regardless of how much water is used, the water department could meet its expenses, regardless of consumption. Mid-range users would bear the brunt of the increase while low end users, those less than 500 cubic feet, would not experience a cost increase while high end users would experience a decrease in cost.
The third option, Wierzbicki’s recommendation, would charge a common minimum rate for water and sewer, with a set cost per cubic foot of water used. The minimum rate would be determined as in the second option, based on fixed costs. The result of such a structure would increase the costs to the larger user while decreasing the costs to the mid range user which makes up about fifty percent of the cities water customers.
No decision was made by City Council at this meeting on water rates, rather the design of the meeting was to provide Council members with background information on revenues, expenses, and alternatives, so they may make educated decisions on water revenue questions in the future.
A second presentation, made by Dr. Timothy Wolfe, a chemist from MWH, an engineering and consultant firm from Columbus, Ohio, concerned the scaling problem being experienced by consumers of New Philadelphia water. Wolfe explained that while the scaling problem was major concern, not only to the people of the city but to the water department as well, the problem was one of economics, not health. Wolfe stated that the present system used to treat water in New Philadelphia, does so with good results as far as purification is concerned, but during the process decreases the amount of oxygen in the treated water. While this does not affect the water as far as human consumption or use is concerned, it does decrease the ability of the water to hold the chemicals which cause the scaling problem the city is experiencing. The solution, which Wolfe said would cure the problem, is the installation of equipment which would add carbon dioxide to the water, replacing the oxygen lost in the purification process.
Mr. Ricklic, City Water Superintendent, told council members that scaling in water meters was costing the city large amounts of revenue as scaling causes them to report lower water usage than is actually used. When asked for an estimate of what the loss might be Ricklic did not provide a figure but said meters that had been tested have shown up to a 50% error. The cost of the equipment to prevent the scaling problem was not available, but estimates from Wolfe and Ricklic ranged from “a couple of hundred thousand” to “somewhere around half a million.”
The unanswered question, the important, overriding question, is how is the equipment necessary to correct the scaling problem going to be paid for? Revenues are down, unemployment is up, and the depression shows no signs of improving in the foreseeable future. This was not covered in either presentation, nor should it have been. It is the responsibility of the Administration, and City Council, to seriously address the financial issues the City faces before any such legislation is considered.
Both presentations were worthwhile and should have provided council members with the information they need to understand the proposal for water and sewer rate adjustments in the near future. The Administration was well represented before Council by Ms. Wierzbicki and Dr. Wolfe.
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