Future sewer rates in Moab city will now more accurately reflect actual usage, city officials said this week. The Moab City Council on July 25 unanimously approved a new structure for wastewater services that calculates rates based on the cost of services instead of revenue needs.
“It’s about more fairly assessing the costs of doing business in the sewer world to those who use it,” said Moab City Manager David Everitt. “Instead of raising rates for everybody, those who have more intensive use of a sewer system in volume or concentration will pay more than those who have regular, baseline residential usage.”
Although residential customers can also expect to see rate increases phased in over several years, Everitt said commercial properties will see greater increases based on a more accurate usage metric.
“Commercial use, in particular hotels and restaurants, should be dealt with differently than regular residential uses,” he said.
For example, the monthly base rate for an overnight accommodations condominium with two or more bedrooms will increase from $19.10 in 2017 to $23.85 by 2021, with added charges for each additional condominium unit. Those charges will increase from $3.40 in 2018 to $13.65 by 2021.
Similarly, a restaurant or fast food establishment will see rates increase in phases from $19.10 in 2017 to $21.55 by 2021. Such establishments will also pay additional charges for water meters beginning in 2018. For example, a 1.5-inch water meter will increase in cost from $19.10 in 2018 to $24.80 by 2021, and an 8-inch water meter will increase from $232.25 in 2018 to $335.95 by 2021.
For residential users, the monthly base rate for a single-family residential unit, which is $14.40 this year, will be incrementally increased to $21.55 by fiscal year 2021. And a multifamily unit with two bedrooms or more will rise from $19.10 to $21.55 by fiscal year 2021, with charges per each additional unit rising from $2.80 in 2018 to $11.40 by 2021.
According to a May 2017 report by Bowen, Collins & Associates, Inc., a gradual phase-in will “avoid shocking customers with a sudden rate increase.”
“The changes to the rate payment calculation method — additional unit charges, wastewater strength charges, meter size charges, etc. — have all been phased in gradually to minimize potential impacts to any given customer,” the company stated in the report.
Bowen, Collins also described the new rate structure as “more equitable” than simply basing sewer rates off needed revenue.
Moab city held a public hearing on the matter in June, and reportedly received no public comment.
Rate increases were first discussed in April, when the Moab City Council approved sewer rate increases based on revenue needs.
The Utah Department of Environmental Quality wanted the city to adopt the new rates at that time, Everitt said, in order close on the bond to finance construction of the new wastewater treatment plant.
“The rate change [Bowen Collins] did six months ago was a stop-gap measure to get something in place in time for us to show we had the right funding stream available for the wastewater treatment plant,” Everitt said.
He added that Bowen Collins had always planned to do a “more precise, sophisticated” rate structure focused on cost of services after that bond was secured.
Moab city has since received $15 million in financing for the construction of the wastewater treatment facility.
More information on the new rate structure is available in the city’s July 25 council agenda packet, beginning on page 82.