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OWASA BOARD OF DIRECTORS APPROVES FY 2012 BUDGET, 5-YEAR CAPITAL IMPROVEMENTS PROGRAM AND 2% INCREASE IN MONTHLY RATES EFFECTIVE IN OCTOBER

On Thursday night, June 9th, the OWASA Board of Directors approved the annual budget for the fiscal year from July, 2011 through June, 2012 (FY 2012), a 5-year capital improvements program (CIP) to continue rehabilitation and replacement of aging water and sewer facilities, and rate increases that will go into effect in October.

The Board’s decisions followed public hearings on May 26th.

Highlights

  • OWASA is a non-profit, community-owned agency with cost-of-service rates.
  • The 2% increase in monthly rates would add $1.66 to a residential bill for 5,000 gallons of water and sewer service. Please see the additional bill examples below.
  • The FY 2012 operating budget of $19.1 million for FY 2012 is about $500,000 more than the current budget.
  • The primary reasons for the rate increase are higher costs for chemicals used in water and wastewater treatment, and an expected increase in the cost of maintaining OWASA’s equipment, water and sewer lines, and drinking water and wastewater plants.
  • 1.5 employee positions are eliminated in the FY 2012 budget. Since 2004, OWASA has reduced its workforce by 14%.

Bills with rate increases

Single-family residential water use by OWASA customers averages about 4,500 gallons per month. (OWASA’s bills are rounded down to the nearest 1,000 gallon increment.)  Examples of bills for individually-metered residences:

 

Water and sewer use per month

Current bill

Bill with October, 2011 rates

Increase

2,000 gallons

$44.04

$44.92

$0.88

3,000 gallons

$56.65

$57.79

$1.14

4,000 gallons

$69.26

$70.66

$1.40

5,000 gallons

$81.87

$83.53

$1.66

6,000 gallons

$95.90

$97.84

$1.94

7,000 gallons

$107.93

$112.15

$2.22

8,000 gallons

$123.96

$126.46

$2.50

 

Monthly rates will also increase about 2% for businesses, master-metered multi-family developments and institutional customers, who pay “seasonal” water rates; and for irrigation-only customers.

The one-time “service availability” or capacity fees for initial connections to the OWASA system will increase about 3.4%, which reflects the 5-year historical average increase in the construction cost index.

Any customer who wishes to have an estimate of bills with the new rates is invited to call OWASA Public Affairs at 537-4267 or send an e-mail to webmaster@owasa.org. OWASA will estimate bills based on water use in the last year.

The average cost of one gallon of water and sewer service for an individually-metered residence using 5,000 gallons per month is 1.6 cents per gallon.

OWASA is a public, non-profit agency with cost-of-service rates

OWASA’s cost-of-service rates are calculated to fund operating and maintenance costs; debt payment obligations; infrastructure replacement, renewal and improvements to maintain reliable, quality service; reserves necessary to be financially sound; and sustainability initiatives and investments.

OWASA has no shareholders. OWASA is owned by the community in the same sense that public facilities such as local streets and parks are owned by the community.

Infrastructure investments/capital improvements

One of OWASA’s highest priorities is renewing, replacing and improving its “infrastructure” of pipelines, treatment facilities, etc. to ensure reliable, quality service to current and future customers. Cash funding of new capital projects and debt payments for previously completed projects are the largest single cost (45%) in OWASA’s monthly bills.

The $9.9 million CIP for FY 2012 includes $3.4 million to replace aging water lines; $3.2 million to complete the Bolin Creek sewer replacement; and various projects at OWASA’s water and wastewater treatment plants, pump stations, etc.

The 5-year CIP for FY 2012-16 is about $63 million and it includes $35.5 million for renewal, replacement and improvement of water and sewer lines to maintain the reliability and quality of OWASA’s services; and $21 million of work at OWASA’s two treatment plants.

Debt payments on bonds issued to help pay for capital projects

The FY 2012 budget includes $8.8 million of debt payments on bonds issued since 2001. OWASA funds its capital improvements with a combination of long-term bonds, which are paid off over time, and net revenues available in a given year. The FY 2012 budget for debt payments is about $900,000 less than the FY 2011 budget. About 20% of OWASA’s debt is in variable rate bonds, for which interest rates have fallen due to market conditions.

Other budget items

  • $600,000 for capital equipment.
  • $650,000 annual contribution to the capital and rate stabilization reserve funds.

Financial sustainability

In accord with financial management policies adopted by the Board of Directors, the budget for FY 2012 is designed to meet objectives for financial sustainability, including the amount of financial reserves and the ratio of net income to debt service. These are among the key performance measures on which OWASA’s creditworthiness is based. Continuation of OWASA’s strong credit ratings translates into lower interest rates on bonds, which mean lower costs to OWASA customers.

The value of water and sewer services

OWASA’s water and sewer services and systems:

  • support the public health by providing clean, safe water for personal consumption, food preparation, washing clothes and dishes, etc.;
  • help protect the public safety by providing water for use in fighting fires, including the use of water in sprinkler systems in many buildings; and
  • help protect the natural environment, including local and regional water resources, through the proper collection of wastewater and a high level of wastewater treatment. Treated wastewater from OWASA’s Mason Farm Wastewater Treatment Plant flows via Morgan Creek to Jordan Lake, a regional water source for several communities and a future water source for OWASA.

 Questions or comments?

We invite you to contact us at any time with questions and comments about our rates, budget, capital program, or any of our services, policies, projects, plans, etc.

  • Additional information on the budget and capital program and a summary of current and October 1, 2011 rates are available by clicking here. 
  • Stephen Winters, Director of Finance and Customer Service, 537-4230 or swinters@owasa.org
  • Greg Feller, Public Affairs, 537-4267 or gfeller@owaa.org