Are the rates based on actual cost of service to deal with the biosolids/FOG produced? How did we parse-out those rates?

I would like a bit more emphasis/explanation of how the sewer rates are set as regards the impact of low-medium-high users. Are the rates based on actual cost of service to deal with the biosolids/FOG produced?  How did we parse-out those rates? 

  1. The Cost-of-Service Analysis (COSA) looked at cost drivers (customer/flow/strength). The functional allocation and cost classification separates costs by those cost drivers and allocates them to classes of service. This is done by reviewing the design criteria of the plant in service and allocating each expense in alignment with the design of the plant or specific nature of each expense.
  2. The cost of service identified the costs associated with strength costs (BOD/SS) based on industry standards.  Slide 18* summarized strength related costs at a total of 34% representing $2.9 million of the annual revenue requirement. Costs are allocated to low/medium/high customers based on slide 24* strength allocation factors.  The differences in strength and resulting cost allocation assign the following factors to determine the proportion of the total strength costs assigned - Low range 200 mg/l, medium 400 and high 600.
  3. Slide 25* shows the results of the cost of service analysis. Class cost of service adjustments are not recommended at this time due to the change in rate structure and the potential for customers to change categories and change their use which has potential to change the results of the cost of service. All customer class rates are getting the overall average increase of 2.25% (individual account impacts may vary). This transition period will allow for adjustments to the new structure before a strict COSA application. Otherwise, rates could vary significantly through the settling period.

*FCS Group Presentation Slides

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1. How will these changes affect my residential water and sewer bills?
2. What is the estimated/possible impact for a specific customer?
3. Is the Phase 5 for the Water Reuse & Reclamation Facility (WRRF) the phase that deals with effluent temperature reduction?
4. How do car washes fit into the scheme?
5. Should there be some consideration of the more commercial aspects of “churches” that extend beyond their primary use?
6. Do the water rate computations include the capital costs of maintenance and/or replacement of the reservoirs/water towers?
7. Some explanation of how water use and sewer use are going up 0.85 and 0.75% per year when the population growth is a pretty steady 1.0 - 1.2% per year. This does not, on the surface, make sense.
8. Has/is the U of I been part of this process? It seems they will be impacted by the sewer rates and assuring they know what’s being contemplated is necessary.
9. On slide 19 of the presentation, “multi-family” Is listed as a “non-residential” use. But on slide 24, it seems to reappear as a residential use. I was a bit confused on that - clarification please?
10. Are the rates based on actual cost of service to deal with the biosolids/FOG produced? How did we parse-out those rates?
11. Does the study include enough “buffer” to allow for sufficient funds to be generated if users decrease their consumption/output dramatically in order to reduce their costs?
12. What if many of the commercial clients ask for, and are granted a reduction in their classification? Has the impact of that on the revenue stream been contemplated?
13. The two reserves cited here are ‘one time’ pools of funds, there is not a need to newly replace the reserve in each successive year. Is that right?
14. Slide 24*: Where does the data for flow/BOD/TSS for the various accounts come from? Why are BOD and TSS always the same figure, for a given customer?
15. Two Classes jump +/- 5% COSA. Does that mean we won’t uniformly apply the 2.25% annual increase to sewage costs to all customers in this rate cycle?
16. What is the total cost UI should expect to pay in the coming years for sewage? With declining enrollment, should volumes be reevaluated?
17. Non-Residential - Low, - Medium, - High. Almost identical # of customers, but higher ccf for medium. Confused by difference between flows and % fund allocation for high and medium.
18. What have other communities done in response to virus, delay for a year?
19. Adversely affected customers, will the City be conducting outreach?
20. How does the General Facilities Charge (GFC) apply to existing buildings that are being split?
21. Shouldn’t Multifamily use the same kind of consumption based system as the Non-residential class?