Wednesday, September 30, 2020

Equitable? Inequitable! Water and Wastewater Rates: Part Four

 

 

As you can see explaining the Marco Island Utility Rate Schedule is not a simple task. There are many inequities embedded in the rate schedule that are not apparent to the ratepayers. My goal to inform the ratepayers of those inequities and ultimately recommend to them a Rate Design that will level the playing field; where all ratepayers will be paying a rate based on the Utilities responsibility for Readiness to Serve and the utility customers’ Demand on the Plants.

With that in mind, I will now illustrate an inequity within the Commercial Class of Customers. In my previous writings I mentioned three large volume users, the Hilton, the Marriott and North Marco Utility. In Fiscal Year 2015 the Commercial class of customers generated 168 million gallons of sewage and where billed a Base Charge of $310 thousand. The Hilton, Marriott and North Marco Utility generated 98 million gallons of that sewage or 58% and was Billed a combined Base Charge of $49,000., or 15.8% of base charges. The remaining commercial class of customers generated 70 million gallons of sewage or 42% and they were billed a Base Charge of $261,000., or 84.2% of base charges. The Readiness to Serve and Demand on plant concept must not have applied in this case.

In Fiscal Year 2015 the Commercial Class of Customers consumed 257 million gallons of water and they were Billed a Base Charge of $493,000. The Hilton, and Marriott consumed 106 million gallons of water or 41% and were Billed a Base Charge of $56,000., 11.4% of the base charge. The remaining Commercial Class of Customers consumed 151 million gallons of water or 59% and were Billed a Base Charge of $437,000., or 88.6% of the base charge. Here again the concept of Readiness to Serve and Demand on plant does not apply.

There are inequities in the Single Family Homes class of customer as well with respect to Low Volume users of water are paying the same Base Charge as High

Volume users of water in the majority of cases. I recognize that Single Family Homes have conservation rates based on Tiers (lot size) and Blocks Rates (volume of water they are billed based on lot size). Example: a Single Family Home on a lot size of 9,000 square feet is allotted 21,000 gallons of water to consume at a rate of $4.21 per 1,000 gallons. For every gallon above that up to 32,000 gallons they are billed $6.32 per 1,000 gallons or 50% more per 1,000 gallons. in no way does that they to make up for the Low Base Rate they are charge for the volume of water they consume.

The Billed Base Charges to Low Volume users of Water and Wastewater (Sewer) in the following classes of customers, Commercial, Individually Metered Condominiums and Single Family Homes are SUBSIDIZING the High Volume Water and Wastewater customers as well the Master Metered Condominiums on the Sewer side only.

In addition to the above, Single Family Home, in almost all case, do not have a deduct meter (meters volume of water for exterior use) which is deducted from total water consumed, resulting in amount of water used internally. Sewer Usage is Capped at 6,000 gallons. Because of the current rate structure a home that is vacant for several months during the year and irrigates their lawns, with no internal use will be billed for all gallons water consumed as well as 6,000 gallons for sewer usage. There are more than a thousand homes that fall into this category and the result is (based on the report of gallons processed by the Sewer plant in Fiscal Year 2015). The plant processed 287 million gallons for Single Family Homes. Single Family Homes were billed for 397 million gallons. That 110 million gallons in excess of what the plant processed, generated $587,000 of additional revenue to the Utility, which was a significant reason the utility had $1.2 million revenue surplus Fiscal Year 2015.

It is imperative this City Council Finally recognize that the Current Rate Schedule does not allocating cost of operations appropriately to all class of customers (even though it has been in place for a long time) and take a positive step

forward and implement a Rate Design that levels the playing field for all customer classes

The previous Councils philosophy was if you consume more you pay more and that presently is not the case.

In my next writing I will make my recommendations to the Public and City Council of a Rate Design (which is similar to the one that was recently rejected) that accomplishes that goal. If Council acknowledge that this is THE RIGHT THING TO DO, a Rate Design will be drafted and presented to the Utility ratepayers, be fully vetted with all classes of customers to ensure they understand it’s effect on their bill and that it will withstand a legal challenge.

I hope my writings have enlightened the ratepayers of the Current Rate Schedules Inequities and the need for Equitable Rate Structure.

Respectfully submitted, Amadeo Petricca

331 Regatta Street, Marco Island, Florida 239-394-5464

 

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