NEWS RELEASE

DATE

The Orange Water and Sewer Authority (OWASA) Board of Directors is considering

The rate changes are proposed to go into effect on October 1, 2007.  The effect of the proposed new rates on a customer’s monthly bill would depend on the customer’s level of water use. (Please see the examples below.)

The OWASA Board invites all customers to make comments and ask questions about the proposed new rates in the Board’s public meetings on May 10th and 24th, 2007, and to contact OWASA staff with comments and questions at any time at 537-4267 or by e-mail to webmaster@owasa.org.

Information on the proposed rates, including a calculator which individually-metered residential customers can use to compare their bills at current and proposed rates, is also available on the OWASA Website, www.owasa.org.

OWASA is a community-owned, non-profit public agency with rates and fees calculated on a cost-of-service basis in accord with OWASA’s agreements with the Towns of Chapel Hill and Carrboro and the University, and in OWASA’s legal documents governing the issuance of bonds for water and sewer projects.

Proposed changes in OWASA’s water and sewer rate structures

The OWASA Board is considering whether to adopt the following changes.

Implement a new system of ”increasing block” water rates for individually metered residential customers to provide a greater incentive for conservation by customers and to more equitably recover costs from high volume water users. Water conservation is essential to ensure future availability of high quality drinking water at a reasonable cost.

OWASA is also considering the block rates because, aside from the effect of rate increases, they will help hold down costs for customers who use small amounts of water.

Example 1: For a household using 3,000 gallons of water per month throughout the year, OWASA’s monthly water and sewer bill at current rates averages $40.61. (With seasonal water conservation rates, OWASA bills now vary by time of year.) With the proposed increasing block rates and 9.5% rate increase, the monthly bill would be $41.14, an increase of 53 cents per month or 1.3%. (8.2 percentage points less than the 9.5% proposed combined monthly water and sewer rates.)   

Example 2: In the Chapel Hill-Carrboro community, a typical family in a conventional single-family home uses about 6,000 gallons per month and OWASA’s water and sewer bills average $63.56. With the proposed increasing block rates and 9.5% rate increase, the monthly bill would be $67.65, an increase of $4.09 per month or 6.4%. (3.1 percentage points less than the 9.5% proposed combined monthly water and sewer rates.)   

Example 3: If a household uses 8,000 gallons of water per month from October through April and 20,000 gallons per month due to irrigation, etc. from May through September, the monthly water and sewer bill at current rates averages $124.70. With the proposed increasing block rates and 9.5% rate increase, the monthly bill would be $147.01, an increase of $22.31 per month or 17.8%. (8.3 percentage points more than the 9.5% proposed combined monthly water and sewer rates.)   

A brochure, which OWASA customers will receive with their bills in April, has additional detailed information including the proposed block rates and amounts of water use at which they would apply.

An electronic version of this brochure is also available on the homepage of the OWASA Website, www.owasa.org.

For non-residential and master-metered residential customers such as apartment complexes, the seasonal water conservation rate structure first implemented in May, 2002 would continue.

 
Establish a sewer billing cap of 15,000 gallons per month for individually-metered residential customers. Monthly water use exceeding 15,000 gallons at a residence is very likely outdoor water use that does not result in wastewater going into OWASA’s sewer system.

Proposed 9.5% increase in monthly water and sewer rates for all customers

In order to meet OWASA’s financial performance objectives and fund needed capital improvements such as replacement and renewal of aging water and sewer mains, increases of 6.25% in monthly water rates and 13.75% in sewer rates are proposed. The combined rate increase is 9.5%; however, the effect on individual customers will vary depending on their monthly water and sewer use patterns.

“We believe it is in our customers’ and our community’s interest that OWASA maintains strong financial performance so that we can continue to get favorable interest rates when we issue bonds for capital improvements,” said Mac Clarke, Chair of the OWASA Board of Directors.

Bond financing, which has covered about 80% of OWASA’s capital program in recent years, is necessary to spread out costs to future benefiting customers instead of funding projects with a long useful life from current revenues.

Other proposed fee and rate increases

OWASA charges one-time service availability fees when a location is first connected to the water or sewer system. Availability fees (which are sometimes called impact fees), cover the cost of utility system capacity needed to serve a given customer location.  The customer’s required capacity is determined based on the type of use and meter size.  Availability fees for individually-metered residential units are based on the heated square footage of the home, with fees increasing as home size increases.

An increase of more than 40% in sewer service availability fees is proposed, primarily because of the $50 million upgrade and expansion nearing completion at OWASA’s Mason Farm Wastewater Treatment Plant.

Water service availability fees are proposed to increase about 11% to cover the increased cost of water system capacity due to improvements such as expansion of OWASA’s Jones Ferry Road Water Treatment Plant and raw water transmission facilities in recent years.

Other fee increases and some new fees are proposed to cover the updated costs of services as determined in OWASA’s comprehensive review of water and sewer rates over the last year. For example, a new late payment fee of $2.40 plus interest at a 5% annual rate is proposed; charges for starting a new OWASA service account and recreation at OWASA’s lakes would increase. A detailed list of current and proposed OWASA rates is available on the OWASA Website and on request to OWASA.

Timing of decisions and potential effective date of new rates

The OWASA Board of Directors normally adopts an Annual Budget, 15-year Capital Improvements Program, 5-year Capital Improvements Budget and revised rate schedule in June after public hearings in May. If approved, proposed new rates would go into effect on October 1, 2007.

Media contacts for more or more information

Mac Clarke, Chair of the OWASA Board of Directors
Telephone: 918-3651; e-mail: patandmac@earthlink.net

Ed Kerwin, Executive Director
Telephone: 537-4211; e-mail: ekerwin@owasa.org

Kevin M. Ray, Director of Finance and Customer Service
Telephone: 537-4236; e-mail: kray@owasa.org

Patrick Davis, Utility Manager
Telephone: 537-4210; e-mail: pdavis@owasa.org

Greg Feller, Public Affairs
Telephone: 537-4267 (office) or 369-0404 (mobile); e-mail: gfeller@owasa.org