Consultant recommends higher water, sewer rates

NEW BREMEN - A consultant recommends that village council members raise water and sewer utility rates to generate enough revenue to cover all costs associated with providing the services.

Councilors at Monday night's regular meeting also gave first reading of an ordinance that would authorize a 3% wage increase for all village employees and second reading of a $24.86 million 2022 budget.

Nathan Davis of Ohio Rural Community Assistance Program, a nonprofit that offers training and technical assistance to small and rural communities in the state, provided findings of a water and sewer rate analysis via a remote broadcast to councilors.

He recommends council increase the typical monthly water bill from $18.14 to $23.20 monthly and typical sewer bill from $13.12 to $25.40.

Davis advocated setting rates that encompass full cost recovery. That means rates that cover the entire cost of providing the service including daily operations, preventative and predictive maintenance, short-lived assets, a capital improvement project plan and savings for unplanned emergencies.

Currently, it appears the village, especially on the water side, is supplementing a lot of utility expenses with income tax funds, Davis said.

Income tax revenue, he said, has been supplemented mostly to cover the costs of short lived asset replacements and debt payment, he said.

"What we want to try to do here is to try to move that revenue away from the income tax and toward the water and sewer bill," Davis said. "The reason we want to do that is to try to get your rate into that full cost recovery that we talked about earlier."

Water customers currently pay a minimum of $6 monthly for up to 200 cubic feet of water, Davis said. They are then charged $3.03 per next 100 cubic feet of water up to 1,000 cubic feet of water and $3.09 per 100 cubic feet of water over 1,000 cubic feet of water.

A typical user of 600 cubic feet of water - 4,300 gallons - pays about $18.14 per month, he said.

For 2022, he recommends the village increase the minimum base rate from $6 to $11. The per-100 foot of water charge increase would be very minimal if any, he said.

This would result in typical monthly bill of $23.20 for the user of 600 cubic feet of water.

"But there is a steep increase recommended to that minimum monthly bill for 2022," he said. "For 2023, '24, '25, it's very gradual after that, only a couple of dollars to one dollar to that minimum bill and only slight increases to that usage."

Sewer customers now pay a percentage of their water bill monthly, Davis said.

"Right now it's a percentage of the water bill and the minimum for the first 200 cubic feet is $5 and the usage charge is $2.03 and $2.07. So an average customer is only paying about $13.12 per month toward their sewer bill," he said.

For 2022, he recommends bumping up the minimum bill to $10 and the usage to $3.85 and $3.90.

That would result in a typical bill of $25.40 per typical user, he said.

"The increases on the sewer side, it's more of a two-year effort. It's kind of a steep increase for 2022 and 2023 (and it) levels off in '24 and '25," Davis said.

Councilors asked a few questions and briefly mulled the recommendations but took no formal action.

In addition, council gave second reading to an ordinance setting the 2022 budget at $24.86 million. This year's budget was set at $20.25 million, said fiscal officer Amy Speelman.

The budget includes the $1.16 million Jefferson Street reconstruction project that will entail replacing the street's water, sewer and storm lines, curbs, gutters and sidewalks.

Next year's budget also includes $395,000 to pay off the cost of a fire truck and paying off a $1.5 million loan that was used to purchase farmland the village purchased from Diane Komminsk and rents out to farmers.

Councilors also,

• gave first reading of a 2022 wage ordinance that would authorize an across-the-board 3% raise for village employees.

"With inflation the way it is right now I think it's the right thing to do," said mayor Robert Parker, pointing to a year-over-year inflation increase of 6%

• gave second reading of an ordinance to renew village solicitor Jason This's contract for 2022 and 2023 at $16,000 annually.

• passed on final reading an ordinance to accept salt bids of $140 per ton for 800-900 tons for the village's water treatment plant.

Artesian of Pioneer, a water treatment plant in Pioneer, was the only bidder. The village spends more than $50,000 a year on salt to soften the village's water, according to village administrator Brent Richter said.

• agreed to keep tabled on second reading an ordinance to increase sanitary sewer rates.

• agreed to keep tabled on third reading a resolution to accept the donation of a sign for the Lockkeepers House from the New Bremen Historical Society and the Miami Erie Canal Corridor Association.

The council meets next at 6:30 p.m. Dec. 29 at the village office.