Bo Statham: Rate increase fair for sewer, wastewater systems
July 24, 2013
The Carson City Board of Supervisors is considering major capital improvement plans for the water and wastewater systems. The board's forthcoming decision will impact all users. These plans will improve the performance and reliability of both systems, according to Department of Public Works officials, but user rates must increase to raise necessary revenues.
Projected costs for water system improvements are $17 million; estimated costs for wastewater system repairs are $48 million. Rate increases to fund these costs are phased in during the next 5 years. The wastewater plan does not incorporate new technologies or increase capacity; it will only repair and restore existing facilities.
Utility rates paid by customers are extremely complex — depending on classifications (single family vs. multifamily residential) and usage volume. Generally, high-volume users pay higher rates.
According to DPW, the average water bill for single-family residences will increase by $3.19 monthly in the first year, but the cumulative increase over 5 years will be 55 percent. Similarly, the average commercial customer's monthly water bill will increase by $5.20 and by a significant cumulative percent over the 5 years. These may change significantly by usage volume. The wastewater bills of single-family residences will decrease by $8.51 monthly during the first year but will increase by $13.57 during the five-year term. These are just examples of rate changes.
A community forum was held on July 16, at which senior DPW officials made comprehensive presentations and answered audience questions. Sponsored by Sierra Nevada Forums, the well-publicized meeting was attended by just over 100 people.
The low attendance does not mean the community isn't interested in the subject or concerned about rate increases. It is more likely that ratepayers simply are not yet aware of increased costs they will pay for water and wastewater services in the next 20 years.
No one questioned the need for utility improvements. One question as to why DPW pays any attention to government regulations, however, was quickly, and professionally, dismissed.
An important question was whether building a completely new wastewater system has been considered. The simple answer was that the estimated cost of $135 million is prohibitive. A more thorough analysis seems warranted, given the inefficiencies and incremental costs of periodic replacement projects, as well as the probability that the project cost would be offset over-time by the efficiencies of new technologies and a modern plant.
Several attendees wanted to know why there is no capital reserve to fund the planned improvements. The answer was that previous boards adopted a policy of keeping rates low and not providing for depreciation of assets. Wisely, the current proposals address both issues.
The forum and prior public tours of the wastewater treatment facility offered good outreach opportunities for DPW. Hopefully, a well-informed public will support justified rate increases to ensure that Carson City maintains safe and reliable water and wastewater utility systems.
Bo Statham is a retired lawyer who lived in Civil Rights-era Mississippi. He has lived in Carson City for many years.