Overview of Proposed Ordinance Changes
Sewer Ordinance, Chapter II
Public Hearing 2/28/2007
As discussed at the last Selectmen’s meeting, I am proposing three significant changes to our existing Sewer Ordinance, and its application.
v The method of calculating the per gallon “flow rate”
v The interpretation and application of “living units”
v Addition of a Capital Cost recovery provision
Review of Existing Methodology: (see Attachment 1 of existing ordinance)
v Administrative Fee is calculated by adding the Administrative invoice from the State, our sewer personnel costs, and our sewer office expenses and dividing the total by the number of service connections.
v Flow Charge is calculated by adding the Operating & Maintenance invoice from the State plus 15% (representing the Sewer Department’s costs). The total is divided by an estimate of billable gallons.
Flow Charge: The first change we should consider is to allow us to cover all of our sewer costs, regardless of what the State charges us. Our existing ordinance only allows us to use 15% of whatever the State charges us to cover our sewer department’s costs. This may have been an accurate estimation at one time, but is not now.
v My proposal is that we take our Sewer Department Budget, subtract the revenues to be generated by the Administrative Fees, subtract any other revenues to be generated, and use the balance to represent our actual costs. This balance would be divided by an estimate of billable gallons, just like we do now, to result in a rate per thousand gallons.
Application of this formula for 2007 will result in a rate change from $3.96 to $4.45 per thousand gallons of use. This one change will allow us to collect enough revenue to completely offset our costs. This also means that we will have to diligently review our rates each year, as part of the budget process.
Living Units: We should also look at how the Administrative Fee has been applied under the existing ordinance. The ordinance currently specifies that “each individual dwelling” will pay the quarterly administrative fee and that cottages, camps, motels, hotels, homes, and similar users shall be assessed per unit, which is described as “living unit”.
v The proposal here is to simply clarify and apply the ordinance as it is written. This would reduce the Administrative Fee from $25.49 / quarter to approximately $10.31 / quarter if it were applied to all individual dwellings or living units. The rationale for this is that our system must be maintained to provide service to over 3000 households. Many of these are contributing very little toward the annual costs because they have minimal (often seasonal) use, and do not pay any Administrative fees.
Capital Cost Recovery: This does not need to be written into our ordinance, but a policy statement should explain the process to address the approximately 130 households who have been connected to the sewer system and not paid any “buy in” costs.
v The proposed policy would be to assess each of the users a $1500 Capital Cost Recovery Fee. This fee is consistent with what all other users have paid over the years (and are still paying!). The fee could be paid all at once or spread over 15 years and incorporated into the quarterly sewer bills.
Comparison of New Proposal to Existing Ordinance
1. The purpose of the ordinance is the same, but covers all costs in one paragraph.
2. Review of charges is changed to annually, from “not less than every two years”.
3. Connection Fees – added, with explanation. Not specifed in the existing ordinance. This is the provision that will address any future “capital cost recovery” issues.
4. Explains that the cost of infiltration/inflow will be distributed among users through the flow rate (Same as existing ordinance).
5. Sewer Fund – defined and explained the same as in the existing ordinance.
6. Details how meters will be used to measure use, how industrial users will be measured and regulated, and how the Administrative Fee will be assessed for each “living unit”. No change from existing.
7. Clarifies that the sewer users shall pay for the operation of the sewer system. (same, but eliminates 3 pages of sample calculations)
8. Meter Rules & Regulations – substantially the same, eliminates $5 deposit for meter testing and specifies charges for tampering with equipment.
9. Billing Procedures - Refers to the statutory authority to bill & collect. Removes the exact date that bills will be mailed. Refers to the authority to lien in the event of non-payment, and clarifies the 30 day window for abatement requests.
Also eliminates a whole section that details how the State bills the Town. This should not be written into our Town ordinance because it is not something we have any authority over. We wouldn’t want to have to change our ordinance if their procedures should change.
This new section of our Sewer Ordinance is intended to replace Sections II and III of our existing ordinance.
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