The Village of Homer Board of Trustees unanimously approved rate adjustments to the current water and sewage utility costs for village residents, citing the need to build yearly contingencies for equipment repair.
The adjustments would result in savings for 32 percent of users in the village, while also signifying a slight increase for 28 percent of village users, officials said.
Under the new plan, which was presented at a board of trustees meeting Tuesday, the village would accrue $55,000 in reserves in the next year. The rate adjustment would not go into effect until October, meaning that residents’ bills would not be impacted by the new plan until January of next year.
The new quarterly base water rate, according to the plan, would start at $31.50. If users consume more than 5,000 gallons covered in the base rate, there is a charge of $2.85 per 1,000 gallons.
Currently, the quarterly base water rate shown on the village’s website starts at $21 per 5,000 gallons. Users pay $3.25 for every 1,000 gallons after having used more than 5,001 and up to 160,000. That rate decreases to $2.50 for every 1,000 gallons used after 160,001.
The new quarterly sewage base rate, officials said, would start at $45.50, and would cover costs up until 5,000 gallons. If users take up more than 5,001 gallons and up to 160,000 gallons, they are charged $6.25 per every 1,000 gallons used. That rate decreases to $3.50 per 1,000 gallons if users require more than 160,001 gallons.
The current base rate for sewage shown on the village’s website starts at $60 per the first 5,000 gallons. If users take up more than 5,001 gallons and up to 160,000, the rate for every 1,000 after that is $3. The rate then decreases to $2.50 for every 1,000 gallons for users charged for more than 160,001 gallons total.
“The goal of the project is to create a rate structure that allows the water and sewer programs to be self-funded so that each raises enough money in revenue to pay for annual expenses, plus a small reserve,” according to a report presented to the village trustees by mayor Hal McCabe.
McCabe’s report estimates that 32 percent of bills in the village will decrease, while another 28 percent will increase by $15 or less.
The village expects to account for approximately 20 million gallons of water and sewage combined between 2021-2022. Under the new plan, this would generate $895,676. Under the previous rate, the village would have only generated slightly more than $810,000 in revenue. The village’s sewage and water expenses for the year are estimated at $839,846.
Village officials were careful to deem the rate adjustment an increase.
“The rate is actually not a rate increase,” said village treasurer Tanya Digennaro. “It is a rate adjustment because the base rate will cover all of our fixed costs, and then, the consumption covers our variable costs. We are putting some in reserves and getting rid of any deficits.”
Village board member Ed Finkbeiner stressed the importance of the rate adjustment.
“We need to have a reserve in case equipment breaks,” Finkbeiner said. “We have (operated) a deficit two years in a row, we need to stop the hemorrhaging (of money) and hopefully grow our reserves a little bit.”