Copperas Cove city council discusses proposed utility rate increases, will discuss again Aug. 13
By BRITTANY FHOLER
During a special workshop on Tuesday evening, the Copperas Cove city council discussed proposed rate increases for water and sewer services, and solid waste collection.
Interim Budget Director and Ariana Beckman and city manager Ryan Haverlah led council members through discussion and asked for direction regarding a proposed rate increase for Water and Sewer and Solid Waste.
Included in the FY 2020 budget was a one percent increase in Water and Sewer rates, a 5.5 percent or $1 fee increase in Solid Waste collection rates as well as a $5 per ton fee increase for the landfill.
The current base rate for water is $12, as is the base rate for sewer. The volumetric rate for water is $4.75 per 1,000 gallons and the volumetric rate for sewer is $6 per 1,000 gallons. The current solid waste fee is $18 per month.
A proposed one percent increase would add $0.12 to each of the base rates, $0.05 to the volumetric rate for 1,000 gallons for water and $0.06 to the volumetric rate for sewer.
For a residential customer using 8,000 gallons of water per month with no sprinkler, their current utility bill should be $135.49. With the proposed increase, their bill would be $137.69, an increase of $2.20.
Water & Sewer Fund revenues are projected to be $13,383,232 for FY 2020, a three percent increase of $384,309, compared to the current year. This is including revenue from the proposed rate increases.
The city did not raise its utility rates from 2011 to 2017. Haverlah said that a study conducted in 2017 reported that utility rates should increase over a five-year period by 22 percent and city council elected not to abide by that rate study. For Solid Waste, the end rate after five years was supposed to be close to $25 for residential customers, he added.
“Those are really extreme numbers and changes, and as council talked about the last two years, the council was not interested in implementing those rates as a result of that rate study,” Haverlah said. “However I do want to provide some historical reference to you that in the past, city council has not adjusted utility rates in modest increments, and when those modest increments were not adjusted or implemented in the fee schedule, the Water and Sewer Fund as well as the Solid Waste Fund were not financially sound.”
The available funds in those department budgets dropped below the ideal fund balance and at one point in 2011, the Water and Sewer Fund would have ended with a negative fund balance unless action was taken by council, he added.
Council member Marc Payne asked whether the proposed increases would be enough to avoid having to raise the rates significantly later on.
“Is a $1 [increase] enough in the Solid Waste fund? Yes,” Haverlah said. “Is a one percent adjustment in the Water and Sewer Fund? Now, it’ll make it work, but I can almost foresee that based on our historical adjustments, in the future years, it’ll be more than one percent.”
The proposed one percent is sufficient for next year’s budget, he added.
Manning asked to see via the spreadsheet presentation the difference a 1.5 percent increase would have over the propose one percent increase. This changed the utility bill of a resident with no sprinkler system using 8,000 gallons from $135.49 to $138.21, a $2.72 increase.
Haverlah said he would be coming back with additional information and figures for the utility rate at their August 13 meeting.
The city has already factored in costs for utility administration into its proposed budget for the Utility Administration Department, as it has ever since the Copperas Cove city council approved a software as service agreement with a 15-year contract with FATHOM back in 2016.
Utility Administration costs have increased over the years
The amount allocated for the Utility Administration department and specifically the contractual services with FATHOM has increased each year since 2016-2017, with the current proposed FY 2020 budget’s portion for contractual services with FATHOM being $331,541 more than the entire budget for Utility Administration for FY 2015-2016. The total budget for Utility Administration has more than doubled since the city entered into a contract with FATHOM Utility.
The number of utility customers has remained steady, not exceeding the expected 13,600, for the past few years. For the FY 2019 budget, the city accounted for 15,800 utility customers.
The proposed budget for Utility Administration is $1,312, 853. Of that amount, 71 percent is for contractual services with FATHOM at $938,336.
The city accounts for this increase to potentially being billed for excess calls through FATHOM utility billing system, which the city manager told the council at a budet workshop earlier in July as anything above 10 percent call volume.
The amount for salaries, benefits and support is budgeted for $309,670, which includes a one percent cost of living adjustment increase for all city employees. There were also salary savings realized in due to vacancies, according to the proposed budget document.
Back in the 2015-2016 budget, the total cost for Utility Administration was $606,795, including $433,516 for salaries, benefits and support; $89,736 for supplies and materials; $33,564 for repairs and maintenance; $33,564 for contractual services and $49,979 for designated expenses.
For 2015-2016, there were 13,600 expected utility customers, with 153,000 meters read and 1,800 disconnects for non-payment, with 150,000 payment transactions, according to the FY 2015-2016 adopted budget on the city’s website.
There were 2,720 customers per utility customer service representative. Under effectiveness, the target for the meter reading error rate was 2.7 percent, the same as for FY 2014 Actual and the FY 2015 Budget.
For FY 2016-2017, the budget for Utility Administration in the Water and Sewer Fund saw a significant increase in contractual services and decreases in salaries and benefits; supplies and materials; and maintenance and repair due to the city council entering into a contact with FATHOM.
The total budget 2016-2017 budget for Utility Administration was $853,126. Of that amount, 85 percent was for services with FATHOM, totaling $721,262. The total staffing level went from 11 to two 2016-2017, removing three of five customer service representatives, all four meter-readers/service technicians, one billing technician and one utilities supervisor.
The number of utility customers was listed as 13,500 in the FY 2016 amended budget, increasing slightly to 13,600 in FY 2017. There were no significant changes in the data for performance measures between the adopted FY 2017 budget and previous years’ budgets.
In the documents for the FY 2018 budget, the amount for contractual services dropped to $401,388, and the amount for salaries, benefits and support was increased to $266,182.
For the FY 2018 budget, the total budgeted amount for Utility Administration was $921,996. Of that, 78 percent was for contractual services with FATHOM, at $720,250.
Between the adoption of the FY 2017 budget and the FY 2018 budget, city council approved adding two positions, a utilities supervisor and a meter reader/service technician, bringing the total number of city employees up to four.
The number of utility customers has stayed above 13,000, with 13,600 set for the FY 2018 budget.
The number of meters read per month per reader was 3,727, under the FY 2016 Actual budget, and increased to 14,917 for the FY 2017 Current Budget, according to the FY 2018 Adopted Budget document. For the FY 2018 Adopted Budget, the number was set at 14,167.
The number of customers per utility customer service representative increased from 3,369 in FY 2016 to 6,750 in FY 2017 and was planned to hit 6,800 for the FY 2018 Adopted Budget.
Also increasing was the number of payment transactions per utility customer service representative, going from 26,296 in FY 2016 to 66,395 in FY 2017. For the FY 2018 Adopted Budget, the number was 88,400.
The meter reading error rate was 2.7 percent in FY 2016 and again set at 2.7 percent for the FY 2017 budget. The FY 2017 year-end projection was at 6 percent when the FY 2018 budget was presented. For the FY 2018 Adopted Budget, the rate was set at 0.1 percent.
The budget for the Utility Administration increased to $1.05 million for the FY 2018 Amended Budget, which includes $728,656 for contractual services.
The adopted budget for FY 2018-2019 was $1,007,249. This accounted for $214,418 in salaries, benefits and support, which includes the full annual cost for the most recent meter reader/service technician position. The amount for contractual services with FATHOM was $749,094, or 74 percent of the total amount.