budgetratehearings52611

The OWASA Board of Directors invites customers to participate in public hearings on Thursday night, May 26th regarding:

  • proposed rate and fee increases, including a potential 2% increase in monthly water and sewer rates;
  • the draft budget for Fiscal Year (FY) 2012; and
  • the draft FY 2012-16 Capital Improvement Program (CIP)

The public hearings will be part of an OWASA Board meeting at 7:00 PM in the Chapel Hill Town Hall, 405 Martin Luther King Jr. Boulevard. The meeting will be televised live on local cable channel 18.

Citizens are invited to attend and speak at the public hearings and to provide comments for the OWASA Board by e-mail to webmaster@owasa.org, by letter to 400 Jones Ferry Road, Carrboro, NC 27510 or by fax to (919) 968-4464.  Written comments will be public records and they will be provided to the OWASA Board.

Highlights

  • OWASA is a non-profit, community-owned agency with cost-of-service rates.
  • The proposed 2% increase in monthly rates would add $1.66 to a typical residential bill for 5,000 gallons of water and sewer service.
  • The proposed operating budget of $19.1 million for FY 2012 is about $500,000 more than the current budget.
  • The primary reasons for the proposed 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 have been eliminated in the FY 2012 budget. Since 2004, OWASA has reduced its workforce by 14%.

Proposed rate and fee 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 proposed 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

 Rates are also proposed to 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 would 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 proposed rates is invited to call Public Affairs at 537-4267 or send an e-mail to webmaster@owasa.org. Estimates are based on water use in the last year.

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 account for about 45% of OWASA’s monthly bill.

The proposed $9.9 million capital budget 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 our water and wastewater treatment plants, pump stations, etc.

The proposed 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 our services; and $21 million of work at our 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 proposed 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.

Budget process

The OWASA Board normally makes decisions on the budget, capital program and rates in June.

FY 2012 will begin on July 1, 2011 and end on June 30, 2012.

The normal effective date for changes in OWASA’s rates is October 1st following the public hearings in May and adoption of the annual budget, etc. in June.

For more information:

  • Additional information on the budget and capital program and a summary of current and proposed rates are available by clicking here 
  • Stephen Winters, Director of Finance and Customer Service, 537-4230 or swinters@owasa.org