01/24/1983 Meeting - Laserfiche WebLink

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e e e II. REGIONAL RATE STUDY Mr. Corssmit said CH2M Hill has been involved in many rate studies. The generalization may be made that what is happening locally is typical nation- wide. Treatment rates have increased because of Environmental Protection Agency local requirements. Consequently, new technology has been installed and the cost is becoming evident. Because of a large amount of grants EPA has given to local communities, the present rates are based on 75% capital. The total capital cost is over $100,000,000. However, from now on, most communities will not be able to get those grants, and consequently, the rates to pay for facilities will be much higher. Mr. Corssmit said two major reasons for the Regional Rate Study are the required revenues increase now that the facilities are built, and will begin to be operated. At the beginning of the study, interest at the regional level was on rates based on Single-family residential use. The City and County are on different fiscal years, and data did not match. March 1, not January 1, is a realistic target for implementing rates. It became evident during the first month of the study that a flow-based rate would not be easy to implement. A major policy issue is that EWEB and SUB are in the business of selling water and not in the business of selling less water. A flow-based rate would be imple- mented for conservation purposes and there would be less incentive for customers to use more water. EWEB was vocal and if water sales are reduced, a negative impact on their financial rating will result. Those are serious consequences of a rate hike. Administrative and mechanical problems of implementing flow-based rates include inability to begin new rates in 1983. 1984 could be the target year. Mr. Corssmit highlighted Table 2-2, which covered the approved and projected MWMC operation and maintenance costs. Mr. Corssmit explained Table 2-9, covering the annual revenue requirements. He highlighted the user charge revenue requirements in Table 2-10. Mr. Corssmit summarized Table 3-3 which covered two-year rates with uniform residential flat rate. Responding to a question, Ms. Hocken said two flat rates for multi-family and single residents would not be fair because of differences in those dwellings. The MWMC is interested in a flow-based rate because it would be more fair. A flow-based rate is a targeted goal, and cooperation from utilities is necessary. Mr. Pye said the MWMC has heard why the utilities don't want to use flow-based rates, but have not heard what the real problems are. Flow-based rates may not be worth it. However, the flow-based rate will be actively pursued. Mr. Corssmit said up until now, EWEB was not being reimbursed for billing expenses. There would be no problem with having EWEB charge their expenses out for billing adjustments. Responding to a question, Ms. Smith said most ~JMC members felt it best to take the necessary step to $10.50 rather than one increase now, and another increase in seven months. The Eugene and Springfield City Councils discussed the procedure, and one step is the preference of the two elected bodies. MlNUTES--Eugene City Council Work Session January 24, 1983 Page 2