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Discussions to begin on sewer rate increase
(by Sue Reid - August 11, 2011)
Discussions to begin on sewer rate increase
By SUE REID
Discussions will begin by September regarding a 2012 sewer rate increase, Solon Public Works Commissioner James S. Stanek said.
The city has had to increase rates every year, Mr. Stanek said. Only one year it did not, and that was in the late 1990s.
Last year, the city approved a 9 percent increase in response to declining revenue over the past few years at its sewage treatment plant.
Before that, the last time the city set a rate schedule was in 2006. It called for an increase of 6 percent annually for that four-year period.
Some type of increase is needed, Mr. Stanek noted.
"We're going to need some type of increase every year for the foreseeable future," he said. "We had hoped for a multiyear increase."
Sewage treatment plant director Paul Solanics said that last year, they had discussed the possibility of increases of 12 percent for two years, and 10 percent for the remaining three years, but council wanted 9 percent.
As a result, "we made some reductions in staff, outsourced truck driving and had some early retirements to help offset some of those rates that we were looking at."
Mr. Stanek said that even last year, it was projected that the revenue at the plant didn't cover the cost, and that the cash balance in the operating fund was declining to a "dangerous point."
That is the result of a number of factors, Mr. Stanek said.
"All of our customers -- residential, commercial and industrial -- are using less water," Mr. Stanek said. "That has a huge impact."
"People are reducing their usages of all utilities, and water is a big one right now," Mr. Solanics added. "Our sewer rates are based on water usage, and we're seeing a reduction of revenue we are bringing in."
Mr. Solanics said that the costs to do business in general "have skyrocketed over the last couple of years."
In addition, there have not been any increases because of residential development, which has been put on hold for the last three years, Mr. Stanek said.
"That affects us because there's no additional usage and no tap-in fees," he said.
In a community where development is taking place, they can level off their costs because they keep adding more users.
"It would be difficult to not have some kind of increase each year if you are not bringing in new customers which we are not," he said.
Mr. Stanek said that even if revenues stay constant, "our costs continue to go up," including chemical costs, utilities and personnel.
Mr. Solanics said the plant has cut back its chemical usage and also cut back its own utilities over the past few years, including electric and gas, in an effort to reduce costs.
Mr. Stanek said at this point, it is too early to tell what the 2012 increase will be. "We're likely going to be talking about at least another 9 percent increase," he said.
That is still significantly less than the rates of communities in the Northeast Ohio Regional Sewer District, he said. "They are already paying more than Solon and getting a bigger increase next year."
For 2011, the average increase for a family of four in Solon was about $40, or $10 each quarter.
Mr. Stanek noted that for any sewer rate increase, a public hearing will be held.
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