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Water-sewer task force makes new recommendations, revises its model

Posted: February 18, 2013 - 4:15pm

After public testimony at its January meeting, the Water-Sewer Task Force last Tuesday made some changes to a draft water-sewer rate schedule that some Homer Spit businesses had criticized as unfairly targeting Spit users.
Using what it called a "cost payer-cost causer" model, the draft fee schedule included an additional fee based on the cost per lift-station area. The new version distributes that cost equally -- "socializes," to use the task force's term -- among all lift-station users. The cost of lift stations is about $157,000 yearly. That drops the fee from $29 per 1,000 gallons to $23 per 1,000 gallons, a significant reduction for businesses that use 10,000 gallons or more monthly.
The latest and final draft water-sewer rate schedule goes up for a public hearing at 5:30 p.m. Tuesday in the Cowles Council Chambers at City Hall. The task force plans to submit its recommendations to the Homer City Council by April, which will then review the recommendations and could enact a new schedule this summer.
"I applaud the task force for taking into consideration our input and revising the model," said Jon Faulkner, the owner of Land's End Resort, who had criticized the early draft fee schedule.
The task force also adjusted the commodity reduction rate, sometimes called the conservation rate, down from 13 percent to 6.5 percent. Faulkner said "conservation" is a misnomer. What that rate means is what the city predicts the change in water usage from year to year would be because of a change in rates.
Most commercial and residential users should welcome the proposed changes. Although the new fee schedule raises the per-gallon water and sewer rate, it makes these changes:
* Except for bulk users, all others users pay the same sewer and water rates, and
* The monthly service fee per housing unit, including apartments, drops from $45 a month to $18 a month.
When the city council changed the fees last year, it added that $45 a month fee to apartments, even if the unit didn't have a separate meter, angering many apartment building owners and renters. Facilities like the Homer Senior Center Friendship Terrace assisted living apartments also took a hit.
Based on 1,000 gallons of water and sewer use, residential customers would see bills drop from $59.39 a month to $42.11 a month and commercial customers see bills drop from $69.04 a month to $42.11 a month.
Bulk user fees would increase from $12.69 per 1,000 gallons to $15 per 1,000 gallons. The city general fund also would pay for water used by all residents, even those on private wells and septic systems, such as fire hydrants. Along with lift-station charges, other fees include a $1.30 per 1,000 gallons fee for high biological oxygen demand, or BOD, for sewage requiring additional treatment, such as that coming from restaurants.
Created by the Homer City Council last year in response to citizen and business complaints about rate changes it made, particularly for apartments, the Water Sewer Task Force has been meeting since March 2012 to review the rates and come up with a fairer schedule.
Beau Burgess, a council member sitting on the task force, had introduced a motion eliminating the lift-station fee and socializing that among all users, but his motion failed.
"One of the principles should be simplicity for the sake of fairness," Burgess said in support of his motion.
The task force members then passed the adopted change in the lift-station fee, with Mayor Beth Wythe and members Lloyd Moore and Ken Castner voting with Burgess in favor. Task force members Bob Howard and Sharon Minsch were absent.
One ongoing issue with Homer's sewer and water system is that it's a large, expensive system with a low density of users. Burgess said the council needs to look at ways to get more users on the system. Castner said the city needs to look at increasing housing density in the downtown core.
"The biggest problem with this water-sewer system is overhead," Moore said. "There is a problem way bigger than this, and it needs to get fixed."
Moore, owner of a bulk water-hauling service, said he could truck sewage off the Spit for less than the cost of the lift stations.
Faulkner said the city should look at its water-sewer rates like a business and make them more affordable so more customers would hook up and would use more water. He also said overhead is too high, and that the city charges more so it can avoid raising sales and property taxes.
"They're simply looking at this as 'we need this amount of money and we need to take it,'" Faulkner said.
Moore said the city shouldn't go to a commodity basis -- a per-gallon, per-user basis spread equally.
"Don't go to commodity," he said. "It will crush the economy."
Wythe said the task force is trying to avoid a water-sewer fee schedule based on politics.
"You're never going to have a perfect rate, and it will be reviewed every two years, but you can't have it reviewed on a political basis," she said.
Michael Armstrong can be reached at michael.armstrong@homernews.com.

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Sewer/water fee comparison
Old schedule vs. new schedule (proposed)
Residential:
Old service charge: ($20 sewer, $25 water) $45 per unit
Sewer per 1,000 gallons: $4.42
Water per 1,000 gallons: $9.97
Total charge per unit: $59.39

Commercial:
Old service charge: ($20 sewer, $25 water) $45 per unit
Sewer per 1,000 gallons: $11.40
Water per 1,000 gallons: $12.64
Total charge per unit: $69.04

New service charge (commercial and residential): $18 unit
Sewer per 1,000 gallons: $13
Water per 1,000 gallons: $11.11
Total charge per unit: $42.11
With BOD (biological oxygen demand) and lift station charge: $66.41/1,000 gallons
With BOD only: $43.41/1,000 gallons

Residential savings: $17.28/1,000 gallons
Commercial savings: $26.93/1,000 gallons (no BOD or lift station charges)

Bulk water:
Old: Per 1,000 gallons: $12.69
New: Per 1,000 gallons: $15

Additional charges:
Lift station charge per 1,000 gallons: $23
High BOD (biological oxygen demand) charge per 1,000 gallons: $1.30

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