The fiscal year 2007-2008 budget includes a 10% electric rate increase for the upcoming year. At their June 11th meeting, the City Council unanimously approved the increase, which will take effect with electric bills issued after June 30, 2007. The increase will therefore be included on the bills which the City mails out at the end of July, and are received with the customers at the beginning of August.
Fiscal years 2006-2007 and 2007-2008 have required significant expenditures for delayed maintenance capital improvements such as the Johnson Creek Pump Station, Oregon Avenue Sewer Line Replacement, and the Wastewater Plant Ultra-Violet Disinfection System, as well as increased equipment, materials, and supply costs. As a result, revenues have not kept up with expenditures, and beginning balances have declined. In addition, there is a need to increase reserves for such future projects as an Emergency Generator and Inflow & Infiltration projects. Although sewer rates were not increased last year, a 10% increase this year would be consistent with the City’s practice over the last several years of gradually instituting multiple smaller annual rate increases, to keep the impacts on the customers as low a possible, to avoid having to borrow funds for capital improvements, and to avoid the necessity of extremely large single rate increases.
The City Charter, Section 47, which was adopted on September 19, 1995, restricts the ability of the City Council to increase sewer utility rates. However, in the Stadelman v. City of Bandon sewer rate suit, the court ruled that a pre-existing June 30, 1992 bond financing agreement requires the City to maintain sewer rates at a level necessary to properly operate and maintain the system, and to meet the debt service obligations. Therefore, in accordance with that court ruling and the bond financing agreement, the City Council has the authority and obligation to increase sewer rates to meet those requirements.
The rate increase is projected to generate an additional $64,700 in sewer revenues during the upcoming fiscal year. For an inside-City residence using an average of 5,000 gallons of water per month, the 10% increase would raise the monthly utility bill by $2.52 (from $25.24 to $27.76), plus the 10% utility sales tax. Since sewage generation cannot be measured, the City’s sewer charges are based on water consumption. The following table illustrates the increased Bandon sewer rates for an average inside-City residence using 5,000 gallons of water per month, and a large commercial customer, such as a motel, using an average of 106,000 gallons of water per month, compared to corresponding rates for the nearby small cities of Coquille, Gold Beach, Myrtle Point, and Port Orford. The rates shown do not reflect General Obligation Bond debt service payments (if any) or General Fund subsidies (if any).
Monthly bill for a single-family residence using an average of 5,000 gallons of water:
- City of Gold Beach $ 49.50
- City of Port Orford $ 47.00
- City of Coquille $ 42.10
- City of Myrtle Point $ 29.70*
- City of Bandon $ 27.76
* Myrtle Point also has a reduced rate of $24.20 for seniors, disabled, and vacant premises.
Monthly bill for a large commercial customer, such as a motel, using an average of 106,000 gallons of water:
- City of Coquille $1,018.64
- City of Gold Beach $ 593.89
- City of Port Orford $ 536.85
- City of Myrtle Point $ 532.19
- City of Bandon $ 355.40
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