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About Vernonia's voice. (Vernonia, OR) 2007-current | View Entire Issue (July 19, 2018)
community july19 2018 3 Water and Sewer Rate Update continued from front page consumption. A common misconception about allowance is it’s somehow free or included in the base rate. The revenue to cover allowance water comes from a higher consumptive rate; making up the difference from higher consumption customers. Customers using above 4,000 gallons per month were subsidizing customers using less than 4,000 gallons. Customers in the 2,000-4,000 gallon range were paying for consumption, but the consumptive charge did not fully cover the true cost to produce the water used. There are several reasons why a water utility may have a consumption allowance, most of which don’t apply to our small, homogenous water system. The water allowance did serve an im- portant purpose at one time by ensuring enough revenue. The key to setting our water and sewer rates is having accu- rate data about consumption and meter multipliers to plug into our rate calcula- tors. The City didn’t have the capacity to collect, analyze and have confidence in those numbers at the time. With the change to new billing software, and maintaining accurate monthly data we can now feel confident in setting rates which will generate the revenue neces- sary to cover the budget. One of the negative consequenc- es of the water allowance is as we recov- ered from the flood and recession we be- gan to generate excess revenue through the consumptive rate. This came at the expense of our large meter customers, businesses and families. This is the op- posite of the aforementioned philosophy. Instead of budgeting for reserves, and distributing across all ratepayers, certain types of customers were contributing more than their fair share. With the City moving toward better budgeting, and fo- cusing on being fair to all customers, it was time to say goodbye to water allow- ance. If you happen to be one of the few who sees a slight increase in your overall bill, or the consumption portion thereof, it was likely that one of your neighbors was covering your share of the water budget recovered through the consump- tive rate. Better Budgets A key change to the City’s wa- ter and sewer budgets are self-regulating line items, such as contingency and op- erating reserves. For example, the City maintains a 15% contingency for both water and sewer. If we aren’t required to expend those funds, and see added reve- nue from growth as we have had over the last few years, any excess funds reduce the required revenue used to calculate next year’s rate. This year’s rates reflect a $30,000 credit from the water and sew- er contingency funds. If circumstances warranted expending contingency funds, or saw reduction in revenue, the differ- ence to replenish the contingency fund would be equally distributed in next year’s rates. The City is also adding to reserve funds through the budgeting pro- cess year to year as an objective planned goal. This budget driven approach pro- motes rate stability, fairness and trans- parency. Rate Changes for 2018-2019 While there is a small increase in both water and sewer base rates, a ma- jority of customers will see a decrease in their monthly utility bill. Most of this decrease is due to an adjustment in the sewer loan payment. The following ta- ble shows old and new rates, as well as change, for a 3/4” meter. stand to save a lot in the future. Learn More and Get Involved The City has Utility Rate Infor- mation sheets available at City Hall with more information about rates and rate structures for those who are interested. The City is also seeking to fill open po- sitions on the Public Works Committee. This is a great opportunity for anyone interested in learning about, and helping guide the City’s efforts in providing the water, sewer, storm drains and streets our rate and taxpayers expect and deserve. City staff and the Public Works Com- mittee are currently working on several projects and issues related to streets and storm drainage. It’s a great time to get involved! Myself, Financial Director An- gie Handegard, and City Administrator Josette Mitchell have worked hard to provide the citizens of Vernonia with a more fair, lower overall average util- ity bill this year, but that’s our job, and Publisher and Managing Editor Scott Laird 503-367-0098 scott@vernoniasvoice.com Contributors Chip Bubl Tobie Finzel Ben Fousek Karen Kain Aaron Miller Karen Miller Shannon Romtvedt Photography Karen Kain Scott Laird Aaron Miller One year subscription (24 issues) $35 Vernonia’s Voice is published on the 1st and 3rd Thursday of each month. The average 3/4” meter cus- tomer averages 4,600 gallons/month consumption over the course of a year. The previous utility bill, including the $2.00 parks fee, was $138.45; with the new rates, the average utility bill will be $133.15. The Future Looks Good Just like the cost of all the prod- ucts and services we purchase, our base rates will most likely never decrease. However, with the increase in new homes in Vernonia, we will have more customers to share the base portion of the budget, which leads to base rate sta- bility. Where we can achieve lower rates is by paying off loans. With a re- structuring of our sewer loans as part of the new sewer lagoon upgrade, the City was able to make a significant decrease in the sewer loan payment this year. And it keeps getting better! In the next 18 months the City will be paying off one of our sewer loans, which will result in another significant decrease in the sewer loan rate. Of course with future expan- sion and time the City will undoubtedly need to borrow money for future proj- ects. But as I mentioned, we are funding reserves through the budget, which will allow us to borrow less money when that time comes. By saving a little now, we we’re glad to do it. The members of the Public Works Committee and City Coun- cil were equally involved as volunteers and your elected officials - in particular, Public Works Committee member Dale Webb and City Councilor Bruce McNair. Dale and Bruce have been instrumental in helping develop and implement a util- ity rate philosophy, which will serve the community well for years to come. Cedar Side Inn Vernonia’s Voice, LLC PO Box 55 Vernonia, OR 97064 503-367-0098 Want to advertise? Have an article? Contact: scott@vernoniasvoice.com www.VernoniasVoice.com FULL SPORTS PACKAGE! 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