City's Water Rates Set to Go Up 5%, Sewer Rates 6%

The city of Geneva's Committee of the Whole voted 9-1 Monday to recomend a three-year, 5 percent increase in water rates and 6 percent increase in sewer rates.

The first rate increase is to take place almost immediately—July 2012, Geneva Mayor Kevin Burns said.

Fifth Ward Alderman Ralph Dantino cast the dissenting vote.

Prior to that motion, Dantino made a motion to advance "Alternative 2" of the three options suggested by the city's consultants, Municipal & Financial Services Group. 

Burns said Alternative B included a 2.5 percent increase in water rates and 3.5 percent increase in sewer rates, and included $300,000 in capital improvements through 2014. The motion failed 7-3. 

"The committee acted in the best interests of the integrity of the water and sewer system which is need of repair and replacement as well as mitigating the financial impact to the rate payers," Burns said. "The direction by the committee affords both system upgrades and reliability while preserving the per-gallon cost of water at less than 1 cent per gallon."

According to the Municipal & Financial Services report, Alternative 2 was recommended because it would:

• Generate approximately 5 percent more water revenues and 6 percent more sewer revenues in Fiscal Year 2013.

• Collect 10 percent of water and sewer revenues in the fixed charges in the first year of implementation, 15 percent in the second year and 20 percent in the third year which will assist in increasing stability within the funds.

• Impose the fixed charge based on AWWA equivalent meter sizes, which better matches the true cost of providing service to larger-sized meters.

• Minimize the impact of the increases for small users due to including 100 cubic feet within the fixed charges.

The full report is available in PDF form on the city of Geneva website. 

Here is a summary of the three alternatives:

Alternative 1 (Increased Allocation to Fixed Charges) — Alternative 1 includes adoption of the fixed charges, effectively increasing the revenue collected in the fixed charges. The consumption portion of the rate structure remains the same as the current structure. 

Alternative 2 (Increased Allocation to Fixed Charges with Usage Allowance) —Alternative 2 mirrors Alternative 1 with the only difference being that the structure includes a usage allowance of 100 cubic feet per equivalent within the fixed charge. The usage allowance is intended to provide a minimal quantity of water with the fixed charge and is therefore set at 100 cubic feet. This equates to approximately 25 gallons per day for a single-family home.

Alternative 3 (Pyramid Usage Rates) — The third alternative structure uses the same fixed-charge approach as Alternative 1 (increased fixed charge without a usage allowance), but modifies the water consumption fee structure. Within the current structure approximately 75 percent of residential usage is charged the most expensive rate. To encourage conservation and further help the small residential user, as well as provide economic incentives to large users, a pyramid structure was developed. There are four tiers that capture 99 percent of residential usage within the first three inclining tiers. The fourth tier is set at a discount from the second and third tiers and collects a large portion of non-residential usage.