Explanation
Background: This ordinance authorizes an increase in sanitary sewer service rates for the Division of Sewerage and Drainage.
The Department of Public Utilities entered into contract in 2005 for development of updated rate models for the Division of Sewerage and Drainage and the Division of Water. This was the first major review and rewriting of rate models since 1993. The new models follow accepted design practice and fully account for changes in operations and asset valuations for each division. Customer cost of service was established and cost of service rates established for each customer group. Combined with increases in System Capacity Charges the overall increase in revenue to the Division of Sewerage is estimated to be 20%.
The proposed rate configuration for 2006 recognizes that sewer charges disproportionately effect lower income groups and establishes a Low Income Discount program that discounts participant's sewer commodity portion of their quarterly bill by 15%.
The proposed rate structure also establishes a charge related to each customers contribution to spikes in wastewater flow during periods of wet weather. Since increased impervious area corresponds to increased run-off during wet weather, a charge based upon impervious cover is proposed to recover costs of construction of projects necessary to meet the requirements of the two consent orders that mandate elimination of wet weather flow from Combined Sewer Overflows and Sanitary Sewer Overflows. This charge will be assessed based on each property's impervious surface area. Each Equivalent Residential Unit (ERU) is based on the previously determined Stormwater ERU of 2000 sq ft. Residents are assigned one (1) ERU per residence. All other customers are charged based on measured impervious area divided by 2000 sq ft to determine an ERU equivalent. This charge will be set to recover the debt service costs and other expense of all projects related to correcting wet weather overflows. It is also established that no customer will be charged for more than 1000 ERUs. This charge for 2006 is $1.31 per ERU inside city and $.51 per ERU for outside city customers.
Adjustments in rates result in a typical inside city residential sanitary sewer rate increase of 17.2%. When a water increase of 1.83% and a Stormwater increase of 5% are considered the overall impact on a typical residential customer in the City of Columbus is 10.14%.
Fiscal Impact: The Division of Sewerage and Drainage expects an increase of 20% in overall revenue.
Title
To amend Chapter 1147 of the Columbus City Codes 1959, to enact new sanitary sewer service rates for the year beginning January 1, 2006.
Body
WHEREAS, it is necessary to establish new sewer sanitary services rates, effective January 1, 2006, for sewerage services to properties discharging into the sanitary sewerage system of the City of Columbus in order to recover the cost of rendering said sewerage services for the calendar year 2006; and
WHEREAS, the City of Columbus is committed to establishing its rates based on a cost of service basis, where the rates charged to customers are based as closely as possible on the cost of servicing that customer. The rates established herein are based on a rate study that used the cost of service methodology; and
WHEREAS, in addition to the commodity rates, City Council finds it necessary to establish a sewer surcharge to fund the wet weather capital improvement projects required by the Consent Order with the State of Ohio. The cost of these projects in 2006 is expected to be $88.2 million dollars with a debt service requirement of $11.2 million dollars; and
WHEREAS, City Council finds that the most appropriate way to assess the wet weather improvements surcharge is by correlating the surcharge to the amount of impervious surface, as the factor most closely associated with increased inflow and infiltration is impervious cover from urban development and
WHEREAS, the City already uses impervious cover to establish stormwater fees. The Columbus Stormwater Management Program assigns one (1) Equivalent Residential Unit (ERU) to each residential property regardless of size, and 1 ERU for every 2000 square feet of impervious cover for all other properties. City Council finds that, for purposes of the wet weather improvements surcharge, ERUs should be capped at a maximum of 1000 regardless of the size of the property; and
WHEREAS, City of Columbus customers should participate in funding for all of the wet weather projects. Outside customers should not be assessed for combined sewer or priority area projects. At the present time, this results in City of Columbus customers bearing 90% of the wet weather capital costs and Outside Customers bearing 10% of the wet weather capital costs; and
WHEREAS, City Council finds that inside City Customer should pay a wet weather improvement surcharge of $1.31/ERU/month, while outside customers should pay $0.51/ERU/month; and
WHEREAS, City Council recognizes that increased sewer rates disproportionately impact low income residents. Low income residents already pay a higher percentage of their household income in utility bills, and this percentage would increase with higher rates; and
WHEREAS, City Council further recognizes that past rate increases in the City have demonstrated that increasing rates leads to increased delinquencies among the City's customers; delinquencies rates are higher among low income residents. It is well recognized that increased delinquencies are expensive for the City and its customers; and
WHEREAS, City Council finds that adopting a discounted rate for low income users is a recognized method for helping to alleviate the impacts of increased sewer rates; and
WHEREAS, the Sewer and Water Advisory Board has adopted recommendations that are consistent with the rates established in this legislation; and
WHEREAS, City Council finds that the rates, surcharges and the low income discount established herein are equitable to all of the City's customers; now therefore
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That effective January 1, 2006, Section 1147.11 of the Columbus City Codes, 1959, be and is hereby amended to read as follows:
1147.11 Rate Schedules.
(a) Charges Within Corporate Limits. For the purpose stated in Sections 1147.02 and 147.12 there is hereby charged to each user situated within the corporate limits of the city, having any active sewer connection with the sewerage system of such city or otherwise discharging sewerage, industrial wastes, water or other liquids, either directly or indirectly into the city's sewerage system, sewer charges as hereinbefore provided, and in the amount determinable as follows:
(1) For any such lot, parcel of land, building or premises having any connection with the city's sewerage system or otherwise discharging sanitary sewerage, industrial wastes, water or other liquids, either directly or indirectly into the city's sewerage system, such charge shall be based upon the quantity of water used therein as the same is measured by a water meter or meters there in use, as hereinafter described, and there shall be charged:
The charges as prescribed in the rate schedule as follows: SEE 2006 RATE CHART SPREADSHEET ATTACHED
(b) Charges Outside Corporate Limits. For the purpose stated in Sections 1147.02 and 1147.12, there is hereby charged to each user situated outside the corporate limits of the city, having any active sewer connection with the sewerage system of such city or otherwise discharging sewage, industrial wastes, other liquids, either directly or indirectly into the city's sewerage system, sewer charges as hereinbefore provided, and in the amount determinable as follows:
(1) For any such lot, parcel of land, building or premises having any connection with the city's sewerage system or otherwise discharging sanitary sewage, industrial wastes, water or other liquids, either directly or indirectly into the city's sewerage system, such charge shall be based upon the quantity of water used thereon or therein as the same is measured by a water meter or meters there in use, as hereinafter described, and there shall be charged:
The charges as prescribed in the rate schedule as follows: SEE 2006 RATE CHART SPREADSHEET ATTACHED
SECTION 2. Section 5. That Section 1147.19 be established as follows:
1147.19 Low Income Discount for Commodity Charges
(A) For purposes of this section, "low income residential customer" is defined as a direct residential customer of the City (whether inside the City or outside the City) who is eligible for food stamp benefits, Ohio Medicaid, Low Income Home Energy Assistance (LIHEAP), Home Energy Assistance (HEAP), Ohio Works First, social security disability, public housing benefits, Homestead Exemption or any other state or federal low income assistance program acceptable to the Director.
(B) All low income residential customers may receive a fifteen percent (15%) discount on the commodity portion of their sewer bill. This discount will be available to the low residential customer upon application to and approval of the Department of Public Utilities.
(C) The director may adopt regulations necessary to administer and enforce the provisions of this section. Regulations promulgated, pursuant to this chapter by the director shall be published in the City Bulletin, with copies of the regulations being available for public review at the director's office and other locations which may be designated by the director.
(D) Columbus City Council charged the Department of Public Utilities to develop a tiered system to provide low-income users financial relief, in light of the rate increases that are mandated by federal clean water standards. Council appreciates the great progress made. However, more needs to be done to ensure that low-income residents who are not direct utility system customers have the same opportunity for discounts and financial relief as available to low-income residents who are direct users. To that end, the Public Utilities Department shall convene a task force within thirty days to study ways to provide assistance to low-income indirect users, and to provide City Council with recommendations no later than sixty days thereafter.
SECTION 3. That effective January 1, 2006, existing Section 1147.11, (a) and (b) of Chapter 1147 of the Columbus City Codes, 1959, be and is hereby repealed.
SECTION 4. That this ordinance shall take effect and be in force from and after the earliest period allowed by law.