2007-03-10 / News

Decision near on sewer rate increase

By Charles Prince

NEWARK - Two of the three Licking County Commissioners are ready to increase rates for Buckeye Lake Sewer District customers.

Licking County Water and Wastewater Director Ken Salsberry presented a revised spreadsheet detailing proposed rate increases at his regular Monday morning update session with commissioners. He continues to call for an increase from $29 to $40 per month per EDU effective April 2007. A month ago, Salsberry was proposing a $43 per month per EDU rate for 2008. That's now $47 per month per EDU.

"We need to decide for at least one year," Salsberry told commissioners Monday. "$29 (per month) is not going to cover our expenses."

He also told commissioners that he is fairly sure the district can qualify for a 3.25 percent interest rate loan from the Water Pollution Control Loan Fund. That's the fund's standard rate.

Three representatives from Ohio EPA's Division of Environmental and Financial Assistance (DEFA) met with commissioners Feb. 26. Mary Mariani, a DEFA project coorindator, said the district could qualify for a one percent interest rate loan if the district population is between 2,500 and 10,000 and the median household income is $38,000 or less. Merv Bartholow, president of the Buckeye Lake Area Civic Association, previously calculated, with assistance from Sue Spiker of the Licking County Planning Commission, that the district met those two requirements.

Jack Hoogeveen, a DEFA supervisor, said the process starts with a nomination form which really is just a compilation of the planning and engineering information for the project. Steve Malone, a DEFA planning supervisor, said the district has already met most of the environmental requirements in order to get its permit to install. "There are additional requirements for the loan program," he explained. They are: an evaluation of the project's cost effectiveness, an evaluation inflow and infiltration (I & I), impact on wildlife, archeological impact from construction and some other federal requirements that aren't typically part of state requirements. The district has done several I & I studies which should satisfy that requirement.

Hoogeveen explained that all the money for 2007 had been awarded, but 2008 money would be available early next year.

Salsberry asked Hoogeveen if it is normal to seek a loan after construction started. "It is highly irregular, but that's not the point," he said. "If you get permanent financing or become operational (before getting a loan) you can't get funded," Malone added. The district is currently funding construction with short-term notes and construction isn't expected to be complete until next February or so. Salsberry said the district's consent decree requires the plant to be operational by April 2008.

That consent decree will likely improve the district's chances to get a loan. "The overflows will probably help," Malone said.

The draft list of projects funded for 2008 will likely be out in early December. "You'll get a sense long before the list is out," Malone said. "We'll be able to surmise some ranking criteria after we get your nomination," Hoogeveen added. Salsberry told commissioners he would get started on the nomination.

Salsberry is waiting on more information from Ohio EPA before proposing a rate for 2008. The key is when Ohio EPA wants the first payment. If both semi-annual payments are due in 2008, he says the rate must be $47 per month.

His last two spreadsheets have cut the annual increase in salaries/ benefits/travel from the original nine percent to six and the annual increase for contracted services from four percent to three. He continues to believe those revised increases are too low.

The current $3,000 residential tap fee would be increased to $6,000 with $3,000 used to pay down the debt. The action plan submitted early last month by Bartholow, Tim Weisert, Peggy Wells and Charles Prince recommended applying the higher tap fee to buildings constructed after the effective date of the increase.

Salsberry went back to his original growth projection of 26 additional EDUs per year. Salsberry had doubled that to 52 in his February spreadsheet. County Finance Director Chad Fuller feels better about the cut in the growth rate.

Fuller also expressed concern about the delinquency rate. Salsberry is projecting a 10 percent delinquency. The actual rate is closer to seven percent, he said.

A Beacon analysis of district records for 2002 through 2006 found the delinquency ranged from a low of 4.52 percent in 2002 to a high of 8.85 percent in 2004. The average is 6.16 percent over the past fiveyears.

"I started with $40 (per month)," Salsberry responded when Commissioner Doug Smith asked if he looked at $38 or $39 per month. Smith had suggested a rate increase to the high 30's at the Feb. 26 meeting.

Commission President Tim Bubb suggested considering a rate increase resolution on Monday, March 12. "I can live with a $40 rate," Bubb said. He favors setting a rate for 2008 as well since that rate could be adjusted if needed.

Commissioner Marcia Phelps expressed disappointment that nothing has been done on the nomination process. Salsberry said the district's consultant was tied up on jury duty last week. She told him to get someone else from the firmon the project if he still isn't available this week.

"We should have put something in place last year," Phelps added. "I'm having difficulty moving f o rwa r d wi t h u n a n swe r e d questions."

Prince asked Salsberry whether he had reviewed the citizen group's recommendation on changing the commercial metering program. Metered accounts would be billed on their highest monthly usage/ number of users in the preceding calendar year since the plant must have capacity for maximum flows. Residential customers pay the same rate year round whether anyone is living in their home or not. Salsberry said he hadn't looked at it.

"Billing on maximum demand is common for commercial and industrial utility users," Prince said. It is done for electricity, natural gas, water and wastewater.

Salsberry said the metering alternative was designed to address criticism that the "Green Book" criteria to set rates, such as the number of seats in a restaurant, is unfair and hurts development. Prince supports the use of the meters if customers want to use them, but it should be set at the highest monthly usage. Right now, metered customers' charges are adjusted every month. About 40 customers have meters.

"I would prefer to go back to the Green Book," Salsberry told commissioners. "It would be easier." Peggy Wells questioned that since the district is already reading meters monthly and maintaining them. Basing bills on the highest monthly usage means rates would only be changed once a year for these customers rather than monthly.

Prince estimated the district could pick up another 100 to 200 EDU's a month from the change, spreading the impact of the increase over more EDU's. Salsberry agreed to look at the impact.

S a l s b e r r y wi l l u p d a t e commissioners Thursday on the starting date for loan payments and possibly the impact on changing the metering program.That information will likely be reflected in a rate increase resolution that commissioners will consider at 10 a.m. on Monday, March 12.

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