MEMORANDUM
To: Mayor and Board of Commissioners
From: Administrative Services
Date: October 9, 2002
Re: Water Billing
There are two distinct components to this request – a change in the fee schedule for water rates and a change in the utility ordinance for water billing.
The first request is to modify the consolidated fee schedule with respect to water rates. As we have learned, the varying rates for winter and summer cannot be uniformly applied due to the differing bill dates among the eight water billing cycles. Under the present system, cycles 6 and 8 are billed winter rates as late as June and cycles 5 and 8 are billed summer rates as late as December. To rectify this situation, a year round rate is proposed. As you will see, the proposed rate structure continues to be a regressive tier system where the higher the consumption, the higher the rate. You will see an additional tier proposed to better represent our usage goals. The impact of this change is an increase of approximately 5% in the overall water revenues that is derived primarily from the highest tiers of water usage. The purpose for this requested increase is to offset the reduction of water sales revenue derived from Fresh Pond due to the drought like conditions and resulting lack of surface water to process and sell to the Regional Water System.
Fee Schedule Proposed Year Round Rate
Minimum 0 – 3,000 gallons $23.00 (3/4” meter)
3,001 – 20,000 gallons $4.00/thousand gallons
20,001 – 75,000 gallons $4.50/thousand gallons
75,001 – 300,000 gallons $5.00/thousand gallons
300,001 plus gallons $5.50/thousand gallons
Fee Schedule Existing Rates Winter Existing Rates Summer
Minimum 0 – 3,000 gallons $23.00 (3/4” meter) $23.00 (3/4” meter)
3,001 – 20,000 gallons $3.50/thousand gallons $4.50/thousand gals
20,001 – 75,000 gallons $3.50/thousand gallons $4.50/thousand gals
75,001 – 300,000 gallons $3.75/thousand gallons $4.75/thousand gals
300,001 plus gallons $4.00/thousand gallons $5.00/thousand gals
Meter Size Minimum
¾” $23.00
1” $35.00
1 ½” $68.00
2” $129.00
3” $246.00
4” $401.00
6” $1,001.00
There is no proposed change in the minimum billings. Minimums are higher for the larger meters, but the usage rates are the same. This rate structure represents a 4.53% overall annual increase in anticipated revenues, with lower percentage increases and in some instances lower bills on the low usage accounts and higher percentage increases to the high volume users. Some actual examples of the annual impact of this proposed change in rate structure are included with this memo along with the water rates of the other agencies within Dare County.
The second request is to change the language in the utility billing ordinance to better reflect efficient billing and collection practices.
Proposed ordinance language for billing cycles:
Section 21-30 “Water billings shall be mailed on the tenth and twenty-fifth of each month or the closest working day to these dates. Water service charges are immediately due and become past due on the fifth and twentieth of the following month. After the expiration of the appropriate water billing past due date, there shall be levied as a late payment fee an amount equal to ten (10) percent of the principal amount of the bill. Forty (40) days after the billing date of the water billing, water services may be cut off for nonpayment, without further notice. Even when service is cut off, water customers retain the liability for the minimum charge for each billing period the service is discontinued. Payment of water bills may be enforced as provided in 160A-314 of the General Statutes.”
This proposed change in the ordinance allows us to cut off water accounts before the delinquency causes the account to go beyond a full two cycles past due. Our water account deposit structure only calls for $25 per bedroom which is not enough in the season to cover four full months of billed water usage. Further, changing the billing dates allows the billing process to be completed and not interfere with month-end closing of our financial records.
The billing and cutoff policies of several North Carolina agencies are included with this memo for your reference. Please note the average number of days from billing to service cutoff for those surveyed is 35.24 days versus our recommendation of 40 days. This 40 days is intended to be broken down as follows: bill due upon receipt; past due after 25 days; second notices go out 2 days later with 10 days to pay; accounts cutoff 3 days after second notice due date (25+2+10+3=40).
Board action requested: It is requested that the Board adopt the revised fee schedule for water services as well as the revised ordinance language for utilities billing, with an effective date of January 1, 2003, for both.
Staff is available for any questions you may have.
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