Admin Order 58-22-15-F -- Final WW User Fees

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Exhibit B to Administrative Order No. 58-22-15-F Page 1 of 5 CITY MANAGER’S FINDINGS Investigation of Wastewater Service Revenue Needs Pursuant to EC 6.411(2) and Response to the Public Comment Regarding the Proposed Wastewater User Fee Amendment All properties connected to the public wastewater system pay wastewater fees. Eugene provides local wastewater collection services, and the Metropolitan Wastewater Management Commission (MWMC), a partnership of Lane County and the cities of Eugene and Springfield, operates the regional wastewater collection and treatment facilities. The City of Eugene is proposing to increase local wastewater user fees by 7%, effective July 1, 2022. This will likely be the first of a two‐step increase needed to balance this fund. As a reminder, this fund has experienced revenue losses caused by the COVID‐19 pandemic, with approximately $700K lost in FY20, and $440K lost in FY21. The majority of the loss in FY21 represents ongoing lost revenue due to the Policy Team’s decision to keep user fees flat, in response to the community‐wide economic pressures caused by the COVID‐19 pandemic. Costs to keep our existing service level are also rising. Internally, the recent AFSCME contract adoption will increase costs approximately $200K per year for this fund. Externally, the contracted services and materials purchased to provide this service are seeing the same higher‐than‐normal price increases that many other industries are experiencing. The lost revenue and the recent inflationary pressures on our operations costs are putting a significant strain on this fund. The policy team implemented $1.15M of underspending over the last two fiscal years to compensate for these pressures. The underspending was achieved by deferring maintenance activities, such as performing less pipe cleaning and idling a full crew and repair truck (holding vacant positions) which increases the risk for inflow & infiltration of groundwater into the wastewater system. Deferring further maintenance work is not a sustainable option for this service. A higher than average rate increase in FY23 is necessary to keep the wastewater service level consistent. The current forecast period (FY23‐FY27) reflects a second rate increase of approximately 7% is likely in FY24, with the remaining years of the forecast dropping to 2%‐4%, depending on economic activity and inflation. The policy team will continue to evaluate future rate increases with the needs of the infrastructure while also trying to support our community members and customers in these uncertain economic times. What has been charged in the past? RATE COMPONENT FY20 FY21 Current Rate FY22 Proposed Rate FY23 RESIDENTIAL: Per Account Fee: City of Eugene ....................................... No Charge No Charge No Charge No Charge MWMC.................................................. $13.55 $13.55 $14.02 $14.51 Sanitary Sewer Flow‐Based Charge per 1,000 Gallons of Water Used: