Amadeo Petricca: Proposed water rate structure fair and equitable
Change is always a problem and can be confusing. Marco Island City Councils in the past have always kicked the can down the road for political reasons and disregarded the implementation of a fair and equitable utility rate schedule.
It has been stated that the city has not changed the utility rate schedule for 50 years and that is not a correct. In fiscal year 2006, there were two major changes. The water base rate charge was changed for master metered condos. Base charge for master was based on meter size (example: 4-inch meter charge $602.70 for condo, change to a unit charge of 75 percent of a single-family residential water meter charge of $24.11 or $18.08 per condo unit.) That was a significant increase for master metered condos. That change generated approximately $1.1 million of additional revenue to the utility. In addition to that, the city made another change to single-family residential customers when they implemented a block and tier volumetric charge per 1,000 gallons.
This was presented as a revenue neutral change but the city never demonstrated that that was the case.
In years 2010 and 2011, the city council appointed a Utility Advisory Committee and then a Utility Advisory Board. The board consisted of five members appointed by a majority vote of council to keep it a non-political board. The Utility Advisory Board in 2011 developed in conjunction with the expert independent rate consultant 13 different rate structures. After many board presentations to all class of customers and to city council it became a political situation and the council disbanded the Utility Advisory Board because they were dysfunctional and also terminated the services of the consultant.
City council decided to hire another expert independent consultant, demanding that they perform a scientific cost of service study better known as the M-1. That study did not satisfy council as the right rate structure to implement and they request another study, M1 vs. M54 and several other variations of which none were implemented.
After several meeting of council members discussing a new rate structure to be considered for implementation that was in their opinion fair and equitable, a decision was made to use the Equivalent Dwelling Unit (EDU} concept of 170 gallons per day per unit times 30 days equaling 5,100 gallons per month per unit. A rate was established for the base charge per unit for water and sewer as well as the rate per 1,000 gallons charge for water and sewer volumetric consumption.
This methodology in essence treats all classes of customers equally based on their monthly consumption. In order to ascertain the EDUs per dwelling, the average of three highest monthly usages (In this instance it is the total January, February and March 2015) divided by 5,000 (that is the amount the consultant used) equals EDUs for year. Example: 15,000 gals, + 17,000 gals, +18,000 = 50,000 / 5.000 = 10 EDUs for each month of the new billing year which might occur Jan. 1, 2016. Every new billing year the EDU calculation will be performed on the previous year’s highest three month average usage. Only for single-family residents, this calculation is used for WATER ONLY. SEWER FOR THE FIRST YEAR is CAPPED AT ONE EDU AND 6,000 gallons of usage.
My perspective is this is as close as you can get to having the most fair and equitable utility rate design for all classes of customers.
The city has on its website a sample bill for single-family homes to assist you in being able to compare your present bill to what a future bill will be.
If you have any questions concerning the proposed rate design, feel free to contact me.
Reach Amadeo PetrIcca via email at firstname.lastname@example.org