community
july19
2018
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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
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Have an article?
Contact: scott@vernoniasvoice.com
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