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May 22, 2012

Council holds public hearing on utility rates

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DailyProgressBy Sean Tubbs
Charlottesville Tomorrow
Tuesday, May 22, 2011

The Charlottesville City Council held its first public hearing on new utility rates for the fiscal year that begins July 1.
Sharon O'Hare briefs Council on the utility rates for FY2013
“The average customer in the city of Charlottesville who has all three utilities — gas, water and wastewater — will be able to save about $7.04 a month,” said Sharon O’Hare, the city’s assistant finance director, at Monday night's council meeting.
O’Hare said the typical family will pay $24.51 a month for water, about the same as the $24.63 rate under the current structure.
Sewer rates will increase 10.44 percent, from $25.10 a month to $27.72 a month. The Rivanna Water & Sewer Authority increased its wholesale rates by 12.14 percent to cover capital projects such as the $40 million replacement of the Rivanna Pump Station.
Gas rates will decrease 12.25 percent.
O’Hare said water and sewer rates would have been higher if the city had not offset the cost to consumers by spending money collected from facility fees.
“That’s the fee that we charge for new customers to pay for the additional capacity that is required,” O’Hare said.
The fees go into a rate stabilization fund. For the current year the city invested $375,000 from the fund to lower water rates, but will increase that to $700,000 next year.
Councilor Dede Smith said she was concerned about the practice.
“Our [water] rates didn’t really drop,” Smith said. “We infused $700,000 into the system in order to … I don’t want to say make it look like they dropped, but the real price of water is much higher.”
For sewer, the city will spend just over $1 million from the rate stabilization fund, up from $750,000 this year.
The city’s practice of having seasonal rates for water also came under fire. Customers pay higher rates in the summer to encourage conservation.
“For low-income people, having a higher rate on their water in the summer and having a lower rate in the winter is very difficult when you don’t make a whole lot of money,” said Brandon Collins, who ran for the City Council in 2011.
Collins also called for the city to adopt a policy to stop cutting service to customers who do not pay. Instead, he said more outreach should be done to inform customers about assistance programs to ensure they can pay their bills.
In the last fiscal year, O’Hare said there were 1,874 cut-offs due to non-payment.
“What we don’t know is whether we had an individual or a household that had multiple cut-offs within a given year,” O’Hare said. “That number also does not tell you whether someone had their utility cut back on within the same day.”
“We need to figure out how to keep 1,800 shut-offs from happening and I think we have to really get into that this year,” said Councilor Kristin Szakos.
The council will vote on the rates at its next meeting, on June 4. Councilor Dave Norris said he was opposed to the recommendations.
“I cannot support rates for a system that is overpriced and over-built, and I know the rates aren’t going as high as some people feared … in part because we are artificially subsidizing the rates,” Norris said. “I am convinced the rates would be even lower if we had chosen a different direction in terms of meeting our long-term water supply needs.”
In January, Norris and Smith voted against a plan to expand the Ragged Mountain Reservoir by building a new earthen dam as part of the 50-year community water supply plan.


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