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Lincoln plans big changes in sewer
fee structure
Public meeting to be held March 26th
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 [March 24, 2018]
LINCOLN
The city of Lincoln is
going to be implementing some radical changes in Sewerage fees and
the way those fees are calculated in the very near future. To help
the public understand the reasons for the changes, and to field
questions about these changes, a public meeting will be held on
Monday, January 26th at 6 p.m. at the Johnston Center for Performing
arts on the campus of Lincoln College.
Representatives from Crawford, Murphy and Tilly of Springfield, the
engineers working on the city’s Long-term Control Plan, will explain
the plan and talk about the fee structure.
For the past several years the city has had CMT working on the
Long-term Control Plan for the sewerage system. The project is
mandated by the Environmental Protection Agency and is supposed to
improve the sewerage handling in the city so that the amount of raw
waste entering into public waterways is reduced.
The design work for the LTCP is nearly completed, and CMT has to
submit paperwork to the state regarding what has to be done
structurally in the city and also how the city will pay for a
project that is expected to cost in the range of about $20 million.
Christy Crites and Shannon Brady of CMT visited the city council in
January to discuss how this huge bill would impact sewer rates for
residents. The city will have to borrow money or issue bonds to
cover the cost of the project, then will have to repay that loan
over a number of years. Crites and Brady said that they expected the
interest on the loan would be in the range of two to two -and-a-half
percent annually, and the city should expect an annual payment of
between $1.2 and $1.4 M.
The city will have to earn that amount in addition to what it is
already making from sewer fees in order to maintain the sewer
department and pay the loan.
Crites and Brady said they had done a review of the current sewer
fee structure and the usage of water for each household in the city.
They proposed that the best method for collecting the extra income
needed would be to change the city’s billing system from a monthly
flat rate to a monthly rate based on water consumption.
Currently Lincoln residents are being charge $24 per month for
sewerage service. Crites and Brady recommended that the city
initiate a “base rate” charged to every household of $15.50 per
month, and then calculate a minimum usage and a graduated usage
rate.
The valued the water usage for the sewer rate at $0.50/100 gallon of
water used, and set a minimum water usage rate at 1,600 gallon per
month. For those low volume users, the monthly rate of $24 they are
paying now, would actually drop by $1. However, the average usage
total was 4,000 gallon. Crites and Brady figured that those
customers bill would go from $24 per month to $35.50. For the high
volume customers using up to 8,000 gallons of water per month the
bill would come to $55.50.
Crites and Brady also explained at that meeting that according to
the Illinois EPA, the standard rate for sewerage fees should not
exceed two percent of the median household income of the city
population. They said, based on the median household income, two
percent in Lincoln would equate to $70.83 per month, so their
proposal was still well below that the EPA recommendations.
Crites and Brady said they would move forward with conducting a
similar usage study for the commercial properties in Lincoln and
would return in a few weeks with the recommendations for changing
those billings as well.
On March 13th, the CMT representatives did return to deliver their
report on commercial usage.
Crites and Brady reported first that they had been surprised to
learn that majority of the commercial water usage in Lincoln is
attributed to only seven businesses. The seven included Lincoln
Correctional Center, Logan Correctional Center, Lincoln
Developmental Center (all three paid by the State of Illinois)
International Paper, Eaton, Illinois American South, and the Ardagh
Group (glass factory).
It was explained that even though LDC is abandoned for its original
purpose, buildings are being used at the facility, and the
boiler/power plant is running on a daily basis. Crites and Brady
said that with such a large portion coming from the seven, a big
concern is going to be what would happen if even one of those seven
left Lincoln because of the sewerage rate.
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The representatives said that they had tried to be as mindful as possible of
this as they prepared a new fee structure for the commercial businesses in
Lincoln.
They began with the same rate as the residential fee but increased the usage for
the commercial properties. Based on usage of up to 6,000 gallon the low rate
would come to $35 per month, then the additional gallons would be billed at the
same $0.50 per 100-gallons of water used. They said that the accounts using
1,000,000 of water would be paying a monthly sewerage fee of $3,300. Currently
that same business would be paying $1,500.
Aldermen heard that when rate changes like this occur, they may expect that some
consumers will immediately reduce their water usage. Crites and Brady said the
city could expect a 10 percent or possibly even 20% reduction in residential
usage and a five percent reduction in commercial usage.
The city currently earns about $2.7 M annually in sewerage fees. They must
increase that annual income to just under $4.5 M in order to pay their loan.
With the rate adjustments Crites and Brady are recommending and considering that
some users will reduce their water usage 10 percent, even with this new
structure, the city could fall just shy of making the needed dollars, collecting
just slightly over $4 M total.
During the discussion time, Steve Parrot asked about the certainty that some
users would reduce usage. Crites and Brady said that is the typical scenario.
They added that a secondary impact would come from homeowners updating their
fixtures and appliances. Newer appliances, toilets, and even fixtures are
designed to utilize less water, thus reducing the sewerage usage as well.
Ron Fleshman asked about the tier structure for the commercial properties,
wondering if there could be an additional tier that would cast some commercial
users in a rate that could actually mean they paid more, evening out the
unbalance between the average user and the high seven.
Crites and Brady said that was an option. Another option they said would be to
add a surcharge for waste density, so that those who discharge higher solids
into the sewerage system would pay more.
The representatives were asked how soon the city needed to pass an ordinance
pertaining to these changes. Crites and Brady said that the actual ordinance can
wait, but because there is a time clock ticking at the state, they need to be
able to report to the state that a plan has been formulated. In regard to the
timing, they said that this rate change really needed to happen sooner rather
than later. They noted that while the city did not need to borrow the $20
million right away, there are some costs that will be incurred this year that
need to be paid, so the city needs to start collecting that additional amount.
City Clerk Peggy Bateman was asked if the sewerage billing department was ready
to switch to usage billing over flat rate. She said that the IT person the city
uses is ready to make the software changes, he will just need to know what he is
changing and the dollar amounts.
Waste Treatment Manager Tim Ferguson said the city would also have to work with
Illinois American Water to get the usage figures on a regular basis.
Tracy Welch said he felt that before the city took a vote, there should be a
public hearing so that constituents could hear about the plan from CMT and the
city. City Treasurer Chuck Conzo said that if that were to happen there are
timing rules the city needs to adhere to on giving advance notice of a meeting.
Rick Hoefle asked if the city could hold a hearing in the next week or so, and
hold off on taking a vote on the rate changes until the first voting session in
April.
In the end it was decided that there will be no vote immediately. The city is
hosting a public hearing/meeting on March 26th at the Johnston Center for
Performing Arts. The meeting will be held the day prior to the next Committee of
the Whole. At that COW the item may be placed on the voting agenda for Monday,
April 2nd.
[Nila Smith]
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