The OWASA Board of Directors invites customers to participate in public hearings on Thursday night, May 26th regarding:
· proposed rate and fee increases, including a potential 2% increase in monthly water and sewer rates;
· the draft budget for Fiscal Year (FY) 2012; and
· the draft FY 2012-16 Capital Improvement Program (CIP)
The
public hearings will be part of an OWASA Board meeting at 7:00 PM in
the Chapel Hill Town Hall, 405 Martin Luther King Jr. Boulevard. The
meeting will be televised live on local cable channel 18.
Citizens
are invited to attend and speak at the public hearings and to provide
comments for the OWASA Board by e-mail to webmaster@owasa.org, by letter
to 400 Jones Ferry Road, Carrboro, NC 27510 or by fax to (919)
968-4464. Written comments will be public records and they will be
provided to the OWASA Board.
Highlights
· OWASA is a non-profit, community-owned agency with cost-of-service rates.
·
The proposed 2% increase in monthly rates would add $1.66 to a typical
residential bill for 5,000 gallons of water and sewer service.
· The proposed operating budget of $19.1 million for FY 2012 is about $500,000 more than the current budget.
·
The primary reasons for the proposed rate increase are higher costs for
chemicals used in water and wastewater treatment, and an expected
increase in the cost of maintaining OWASA’s equipment, water and sewer
lines, and drinking water and wastewater plants.
· 1.5 employee positions have been eliminated in the FY 2012 budget. Since 2004, OWASA has reduced its workforce by 14%.
Proposed rate and fee increases
Single-family
residential water use by OWASA customers averages about 4,500 gallons
per month. (OWASA’s bills are rounded down to the nearest 1,000 gallon
increment.)
Examples of bills for individually-metered residences:
Water and sewer use per month | Current bill | Bill with proposed rates | Increase |
2,000 gallons | $44.04 | $44.92 | $0.88 |
3,000 gallons | $56.65 | $57.79 | $1.14 |
4,000 gallons | $69.26 | $70.66 | $1.40 |
5,000 gallons | $81.87 | $83.53 | $1.66 |
6,000 gallons | $95.90 | $97.84 | $1.94 |
7,000 gallons | $107.93 | $112.15 | $2.22 |
8,000 gallons | $123.96 | $126.46 | $2.50 |
As indicated above, a typical residential customer uses 4,000 to 5,000 gallons per month.
Rates
are also proposed to increase about 2% for businesses, master-metered
multi-family developments and institutional customers, who pay
“seasonal” water rates; and for irrigation-only customers.
The
one-time “service availability” or capacity fees for initial connections
to the OWASA system would increase about 3.4%, which reflects the
5-year historical average increase in the construction cost index.
Any
customer who wishes to have an estimate of bills with the proposed
rates is invited to call Public Affairs at 537-4267 or send an e-mail
towebmaster@owasa.org. Estimates are based on water use in the last
year.
OWASA is a public, non-profit agency with cost-of-service rates
OWASA’s
cost-of-service rates are calculated to fund operating and maintenance
costs; debt payment obligations; infrastructure replacement, renewal and
improvements to maintain reliable, quality service; reserves necessary
to be financially sound; and sustainability initiatives and investments.
OWASA
has no shareholders. OWASA is owned by the community in the same sense
that public facilities such as local streets and parks are owned by the
community.
Infrastructure investments/capital improvements
One
of OWASA’s highest priorities is renewing, replacing and improving its
“infrastructure” of pipelines, treatment facilities, etc. to ensure
reliable, quality service to current and future customers. Cash funding
of new capital projects and debt payments for previously completed
projects account for about 45% of OWASA’s monthly bill.
The
proposed $9.9 million capital budget for FY 2012 includes $3.4 million
to replace aging water lines; $3.2 million to complete the Bolin Creek
sewer replacement; and various projects at our water and wastewater
treatment plants, pump stations, etc.
The proposed 5-year CIP
for FY 2012-16 is about $63 million and it includes $35.5 million for
renewal, replacement and improvement of water and sewer lines to
maintain the reliability and quality of our services; and $21 million of
work at our two treatment plants.
Debt payments on bonds issued to help pay for capital projects
The
FY 2012 budget includes $8.8 million of debt payments on bonds issued
since 2001. OWASA funds its capital improvements with a combination of
long-term bonds, which are paid off over time, and net revenues
available in a given year. The FY 2012 budget for debt payments is about
$900,000 less than the FY 2011 budget. About 20% of OWASA’s debt is in
variable rate bonds, for which interest rates have fallen due to market
conditions.
Other budget items
· $600,000 for capital equipment.
· $650,000 annual contribution to the capital and rate stabilization reserve funds.
Financial sustainability
In
accord with financial management policies adopted by the Board of
Directors, the proposed budget for FY 2012 is designed to meet
objectives for financial sustainability, including the amount of
financial reserves and the ratio of net income to debt service. These
are among the key performance measures on which OWASA’s creditworthiness
is based. Continuation of OWASA’s strong credit ratings translates into
lower interest rates on bonds, which mean lower costs to OWASA
customers.
Budget process
The OWASA Board may make decisions on the budget, capital program and rates in June.
FY 2012 will begin on July 1, 2011 and end on June 30, 2012.
The
normal effective date for changes in OWASA’s rates is October
1stfollowing the public hearings in May and adoption of the annual
budget, etc. in June.
For more information:
·
Additional information on the budget and capital program and a summary
of current and proposed rates are available by clicking here. If you
receive this information in paper form, we invite you to visit the OWASA
website,www.owasa.org, click on About OWASA and then click on
Performance & Financial Information.
· Stephen Winters, Director of Finance and Customer Service, 537-4230 orswinters@owasa.org
