Water rate changes proposed
Aug 11, 2012
City officials would like to switch to an entirely usage-based system
By Hillary Borrud / The BulletinThe amount of water Bend residents use to irrigate their yards, wash cars and take showers could begin to have a more visible impact on water bills as early as January.
For years, city officials reviewed different water rate systems. Many City Councilors now support charging utility customers based on how many cubic feet of water they use. The current system gives customers an allowance of 400 cubic feet and charges them for what they use above that amount.
The new rate system city employees are proposing is referred to as “zero allowance," because it would eliminate the flat fee for the first 400 cubic feet. Instead, customers would be charged for the exact number of cubic feet used.
“I’ve been pushing for a long time to just charge people for what they use, and it’s taken a long time for the city to get on board with that concept," City Councilor Jim Clinton said in an interview late last month.
Clinton said the current monthly water allowance overcharges small users and undercharges larger water users.
The costs or savings for various ratepayers are currently unclear, because a consultant working for the city has not yet calculated the rates that would be necessary to pay for city water services under the zero allowance structure.
Conservation is among the reasons some City Councilors cited for their interest in the change, although Finance Director Sonia Andrews said this rate structure does not typically encourage people to save water. That’s because at $1.55 per 100 cubic feet, the cost of water is low enough that only people who drastically reduced their consumption would notice much of a difference, Andrews said.
“If there’s some kind of business where they waste a lot of water, they could implement some measures and maybe save some money," Andrews said. “If you’re already very conservation-minded and already not wasting a lot, I don’t know if it will save you much money."
“However, going to the zero allowance would mean you’re now paying for every cubic foot of water," Andrews said.
In other words, a residential customer who lives in an apartment and consumes only 300 cubic feet of water per month would no longer pay for a minimum of 400 cubic feet of water. Andrews has not calculated how many people use less than the minimum allowance each month, but she said most homeowners use at least that much during the summer.
City Councilor Tom Greene said the zero allowance would be fairer than the current structure.
“If you have a senior citizen living in a condominium and they don’t use the minimum rate allowance, (the zero allowance is) a lot fairer," Greene said.
Councilor Mark Capell also cited fairness as a reason to change the rate structure.
“It’s something I want to see happen because right now, regardless of how much water you’re using, a low water user that uses less than 400 units is subsidizing a high water user, and that’s not fair," Capell said.
Water bills will still include a base charge, which pays for costs including new construction and maintenance of the city system that brings water to all neighborhoods for fire protection. This costs the city money regardless of how much water people use.
There are 26,000 water accounts in the city.
If the City Council approves a new rate structure, it would be the second rate change to hit residents in one year. Water rates increased on July 1 to pay for improvements to the water and sewer systems.
There is no guarantee the City Council, which rejected two previous versions of a zero-allowance rate structure in recent years, will like this one.
The city still needs the same amount of money to pay for operations and debt from previous and future water projects, so the consultant has to figure out the rates necessary to generate that revenue using the proposed zero-allowance model.
“We would recalculate the rates based on a zero allowance, rather than a 400-cubic-foot allowance," Andrews said. “The calculations are quite complex."
The Infrastructure Advisory Committee likely will review the proposal in October and send its recommendation to the City Council in November, Andrews wrote in an email. It’s still possible that if the council approves it, the new rate structure could take effect in January, Andrews wrote.
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