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HomeMy WebLinkAboutPolicy - Policy for Charging Efland Sewer Customers with WellsORANGE COUNTY BOARD OF COMMISSIONERS ACTION- AGENDA ITEM ABSTRACT Meeting Date: September 20, 2011 Action Agenda Item No. 5 - SUBJECT: Policy for Charging Efland Sewer Customers with Wells DEPARTMENT: Planning_ PUBLIC HEARING: (Y/N)- NO ATTACHMENT(S): 1. Excerpt from the Most- Recent Version of the Efland- Sewer Rules Resolu#ion, as Last Revised on November 4, 2010, with Suggested Change Added 2. Memo from Paul Thames, Former Orange County Engineer, Dated March 9, 2000 INFORMATION CONTACT: Kevin Lindley, -PE, Staff Engineer, 245- 2583 Craig Benedict, Planning Director, 245- 2592 PURPOSE: To consider changing the current policy on monthly billing for Efland sewer residential customers who use wells. BACKGROUND: There are five current residential customers of the Efland sewer system who are sewer-only customers. These customers each have a well that provides their water. Since these customers are not connected to the Orange-Alamance Water System (OAWS), meters are not in place to determine their monthly water and sewer usage. Under the previous rate schedule that was in effect from 1989-2009, these sewer-only customers had been charged the fee for 3,000 gallons of sewer usage per month, which was $15.20. The fee for 3,000 gallons of usage was also the minimum fee that could be charged to any sewer. customer during this time. In fact, the original resolution stated that well-users would be billed the minimum charge each month. On November 4, 2010, the BOCC adopted an amendment to the Efland Sewer Resolution that set the monthly charge for sewer-only customers equal to a bill for 5,000 gallons of sewer usage. This amount of usage was chosen after reviewing other municipalities' policies regarding sewer-only customers and comparing to Orange County customers estimated average use. Orange Water and Sewer Authority (OWASA) charges sewer-only customers as though they use 6,000 gallons, and the City of Mebane charges sewer-only customers for approximately 5,700 gallons of usage each month. For all customers, the Efland average bill was approximately 4,940 gallons of usage per month during 2007 and part of 2008. This usage data was gathered in preparation for the rate study that occurred in 2008 and represents the most recent comprehensive water use data among Efland customers available at the time the sewer-only customer policy was established. Main Issue When the r-ate schedule was changed on July 1, 2009, the minimum charge became the base charge of $7.25 and did not include any sewer usage. Therefore, the sewer-only customers' bills went from $15.20 to $7.25 per month. On July 1, 2010, the base charge increased to _$10.16. After the BOCC approved the amendments to the Efland sewer resolution in November 2010, wfiich included the sewer-only customer billing .amendment, all of the Efland sewer customers were mailed a summary of the amendments adopted by the BOCC. This let#er included information on the upcoming change to the monthly bill for sewer-only customers. The first revised sewer bills for sewer-only cus#omers were mailed around January 20, 2011. The nQw bills for sewer-only customers, based on a usage ~f 5,000 gallons per month, were $54.26. Of the five sewer-only customers on the system, three either visited the Staff Engineer's office or called with concerns about-the high cost of the new bill and the basis for determining- the-amount of the bill. Since t#~at time the rates wer-e increased again on July 1, 2011. The current monthly rate for 5,000 gallons of sewer usage is $66.98. The main concern voiced by the sewer-only customers was that 5,000 gallons was far more than they believed they were actually using. Of the customers with whom the Staff Engineer spoke, two were families of two persons and one was a- family of three persons. These customers believed, based on anecdotal evidence from friends and neighbors whose water use is metered, that they were using less than 5,000 gallons per month and should not be charged for something they were not using. These customers were also concerned that their bill had risen so dramatically in such a short #ime. In addition, the customers represented that they had limited income and the increase of over $40 in their monthly bill would be difficult to pay. Is This Reasonable? There is data to suggest that the sewer-only customers who met with the Staff Engineer use less than the 5,000 gallons for which they are being billed. The Environmental Protection Agency (EPA) did a significant study in 2002 on residential water use that suggests a range of water use between 40-60 gallons of water per person per day, with the lower end being applicable for rural communities whose water comes from wells. Given this, it would be reasonable to assume that a family of three in the Efland area on a well would use between 120 and 150 gallons of water per day, or 3,600 to 4,500 gallons per month. In addition, a study was performed by Orange County engineering staff in 1999-2000 which indicated an average residential water use in the Efland Area of 4,370 gallons per month. The purpose of the study was to determine if there was a correlation between house size in heated square feet and water consumption. It was determined that there was approximately a 30% differential between the largest sized group of houses (over 1,800 square feet) and the smallest sized group of houses (under 900 square feet). A memo summarizing this study is provided at Attachment 2. Finally, in reviewing the data used to set the monthly bill at 5,000 gallons of usage, staff realized that although the average of all customer use from the 2007-2008 year was close to 5,000 gallons per month, the average residential use was less. Closer examination revealed that the average residential water use during that time period was closer to 4,200 gallons per month, which aligns more closely with the 1999-2000 study. Metering -Potential Solution and Secondary Issues The current policy (Attachment 1), as amended on November 4, 2010, states that if a customer believes they are using less than 5,000 gallons, they may install a meter on their well at their expense which would then be monitored each month to determine their usage. The bill would then be based on the actual usage rather than the set amount of 5,000 gallons per month. This is a potential solution to the customers' issue with the amount for which they are being billed. The upfront installation cost would likely be $300-$500, depending on the site. However, at the current sewer rate- of $10.88 per thousand gallons, if a customer was using 3,000 gallons per month, they would save $22.26 per month on their sewer bill. This gives a payback time of approximately 18 months for the meter installation. As the sewer rate increases, the payback time wi11 decrease even =more. However, there are at-least two issues with this alternative. First, the customers who spoke with the Staff Engineer- have stated that paying $54.26 per month is difficult or impossible for -them. T-his would likely make paying $300-$500 to install a meter that much more difficult or impossible. In addition, even if their bill averaged 3,000 gallons per month after the meter was installed, this-would still represent roughly a 400% increase per month when compared #o the previous $10.16 bill. So, even though the payback time for meter ins#allation is real and based on future savings, it is hard for the customer to think of it this way since their bill is still increasing either way. Second, OAWS policy does not allow for its meter readers to enter private property for the .purpose of reading meters. This would preclude them from reading well meters as the meter would most likely not be in the public right-of-way. Therefore, if the customer elected to install a -meter on a water line, OAWS would not be able to read it for the County as they do for the rest of the Efland sewer customers. This means the County would have to enlist some other means of obtaining the meter information. This could be via a privately contracted individual, a County employee, or the customer self-reporting the meter reading to the OAWS office. -Each of these options has its advantages and disadvantages, but in every case would represent either additional expense, liability, and/or staff time, thereby offsetting revenue brought in by the billing adjustment. In addition, discussion of these meter reading options presupposes that the customer has the initial financial ability to pay for the meter installation. Moving forward Because there are many facets to this problem and staff believes more research needs to be done to adequately address the issue, staff is proposing to temporarily set the monthly bill for sewer-only customers at 3,000 gallons per month, which would translate to $45.26 per month. Recent census data suggests that the average household size in the Efland area is 2.5 persons per household. Using an. estimate of 40 gallons per person per month from the previously noted EPA study, this translates to roughly 3,000 gallons of water usage per month. This would alleviate the loophole that occurred when the rate structure was changed and also happens #o coincide with the amount of water use per month for which sewer-only customers used to be billed. Staff proposes enacting this retroactively to the start of the fiscal year. In two months, staff will bring forward a proposal for a more flexible policy for sewer-only customers that can bill more accurately for the estimated usage than the current policy. FINANCIAL IMPACT: The loss of revenue due to lowering the monthly bill for sewer-only customers is approximately $22 per month per customer, or $110 per month total. RECOMMENDATION(S): The Manager recommends the Board approve this interim policy change until a more permanent solution can be studied and developed. ~ncn-~ Easement and Agreement signed by them within 30 days of notification that connection can be made. Astub-out Service Line Fee shall be due from, owed and paid by the user within fifteen (15) days of mailing to the user of an Orange County invoice for the fee. IV. APPLICATION FOR SERVICE Persons seeking service may make application in person at the office of the Orange bounty Planning Department. The application requirements are as follows: I . A deposit as provided in Article V of these rules must accompany the-application .and be paid at the Orange County Planning Department or such other place as is des~nated by-Orange County from-time to time. A Sewer Use and Easement and Agreement must be on file, signed by -the property owner(s)/users. 2. The conditions set forth in Article lX of these rules must be satisfied in the case of an application for service to undeveloped land. 3. Any former user may again become a user by fi~lfilling the application requirements set forth in this article and by paying any applicable availability or other fees. In addition, any such former user applying again to be a user must pay any outstanding account plus interest thereon at the legal rate as'it is established in North Carolina. General Statutes Section 24-1, its successor, and as the same is amended fromtime to time, -compounded annually. Any person who has actually used and benefited from sewer service which has been supplied to premises owned or directly-occupied or used by that person, for which service there is an -outstanding indebtedness remaining due the County, may become a user by completing the application requirements in this article, by paying any availability fee or other applicable fee and by paying the outstanding indebtedness for the service which was supplied to the premises owned or directly occupied or used by such person. V. DEPOSIT A. A minimum cash deposit is required of all users. It shall be equal to the equivalent sewer hill for two months-at 3000 allons per month. The deposit shall be paid either in full at the time an application for service is made or in a maximum of three equal consecutive monthly installments, the first of which must be paid when an application for service is made. Deposits will not draw interest. B. A separate deposit will be required for each connection. C. Each deposit may be redeemed by the user upon disconnection from the system and upon payment in full of all charges for service. r ' VI. INITIAL OR MINIMUM CHARGE A. There will be a separate account established for each sewer connection to the system. Each such account will be in the name of the user. The mionthly charge as provided in the rate schedule (see Attachment A} will be assessed for each account. 4 3 5 C. In those cases where the connection is to property which is in a residential development which has received substantial funding from Orange County as an affordable housing project consistent with the Orange County-Long-Term Affordability_ Policy, there will be a monthly charge established in. the rate schedule for a fund for the perpetual inspection and maintenance of any pump station serving the development. VII._ COUNTY'S RESPONSIBILITY ANi3 LIABILITY A. The County will run a service line from its collection line to the property line, except as provided in Article IX, relating to extensions ofthe-system. B. All plumbing installed by the user for connection to the system will be installed according to the North Carolina State Plumbing Code and will be permitted, inspected and approved by Orange County. C. The County is not liable for damage of any kind resulting from sewage or its collection from the user's premises, unless such damage results directly from negligence on the part of the County. The County is not responsible for any damage done or resulting from any defect or operation failure in the plumbing installed by the user, or in any fixtures or appliances on the user's premises: T'he County is not responsible for negligence of third persons-in the-installation er operation of the System. The County is not responsible for damage caused by forces beyond its control or for the interruption of service caused by forces beyond its control. D. Except in the case of an emergency, the user will be notified in advance of any anticipated- interruption of service. In the case of an emergency the user will be notified as soon thereafter asponsible of the interruption of service. VIII. USER'S RESPONSIBILITY A. The user is responsible for payment of all monthly service charges incurred in connection with sewer service. The owner of the premises to which services are delivered is responsible for all charges as provided for in the Sewer Easement and Agreement. If a delinquent user is not the owner of the premises to which services are delivered, the payment of the delinquent account will not be required before providing services to the premises at the request of a new and different tenant or occupant of the premises except as provided in Article IV.3. of the Rules. B. The user is responsible for installing all plumbing and apparatus necessary to connect to the County's service line and for connecting all plumbing and apparatus to the County's service line. Provided, however, no such connection shall be made without a permit to do so issued by the County and upon such terms and conditions as the permit prescribes. C. All plumbing and apparatus installed by the user will be installed and maintained at the user's expense in accordance with the County's rules and regulations and any other State or Local requirements. D. The user will exercise reasonable care and will be responsible for the exercise of reasonable care by anyone on the user's premises with the user's permission aver any portion of the County system located on the user's premises. Authorized County representatives will be permitted by the user to access the user's property in 4 J4~L~CWh~~ o~ MEMORAI'~DUM '~'O: County Commissioners John Link, County Manager FROM: Paul Thames, PE, County Engineer DATE: Mazch 9, 2000 SUBJECT: Preliminary summary of the evaluation of relationship between water use and home-size in the Efland azea The BOCC, at the 19 October 1999 meeting and public hearing on revisions to the "Ru1es and Regulations for Operation of the System" for the Efland sewer system, adopted a revised fee structure for access and taps onto-the system. The Board did, however, direct staff to conduct a study of water use in the Efland area to determine if there was a demonstrable correlation between water use and size of dwellings. The underlying concept was to ascertain (in a manner similar to a recent OWASA water and sewer availability fee study) if a sliding scale of availability fees determined by home size could be justified on the basis of varying degrees of service demand impact on the system. Accordingly, County Engineering Associate Abdoul Koura-Bodji has spent approximately 300 hours in the process of collecting, evaluating, manipulating and analyzing water use and property tax record data on current Orange-Alamance Water System.cuStomers. The data collection effort has been targeted at -those customers living in the azea that would become a part of a built-out Efland sewer system if that system were developed in accordance with~the 1986 sewer master plan. The study area, includes approximately 532 trietered customers of Orange-Alamance {the area also contains an unknown number of homes served-by on-site wells}. However, the analysis of water use relative to home size eventually came tv include only 458 customers. Forty-two customers were elizzunated asnon-residential users. An additional thirty-two customers were eliminated because the water use records were problematic (building may have been unoccupied, for example) or because the . customer records could not be matched with the County's property and property tax data (size of building could not be determvzed}. Of the 458 customers included in this analysis, 348 were in "stick- built" houses and~fixed foundation double-wide mobile homes {bath types of dwelling having property tax data that includes heated squaze footage). The remaining 110 customers were in single-wide mobile homes that were assumed to have a maximum size of 700 square feet. The average home size, excluding the single wide trailers, was found to be 1320 square feet with an average monthly watex use of 4370 gallons. The average water use for the single-wide trailers -with the assumed average size of 700 square feet -was found to be 4150 gallons per month. Analysis of the data collected for the customer base described above does show a relatively consistent and direct correlation between the size of a home and the amount of water used if the water use of the sin~Ie-wide mobite homes is not included in the anaivsis: The water demand for the single wide mobile homes, when compared to the square footage of the units, is such that it skews the analysis. When home sizes are separated into five ranges -less than 900 square feet, 901 to 1200 square feet, 6 1201 to 150Q square feet, 1501 to 1800 square feet, and greater than 1800 square feet, there is a nearly straight-lzne increase in average water use. However, unlike the OWASA study which showed a five- folddifference in water use between its smallest and largest home size ranges, the Efland analysis shows only anapproximate thirty percent increase from the.smallest to the largest home size ranges. There are a number of reasons why the Efland study has produced results that differ so drastically from those produced by the OSASA study. Amang_ the most telling of these are that: I) the houses in Efland are much smaller and less expensive than those in the- OWASA service area and have fewer water- consumingamenities such as whirlpool baths, hot tubs, swimming pools and lawn irrigation systems; 2} the average income of the residents -of Efland is much lower resulting in more financially conservative consumption characteristics; and 3) Efland is still a primarily rural area which would typically be expected to exhibit more conservative water use practices man those of the. urbanized OWASA service area The primary implication of the Efland water use analysis is that a sliding fee scale based solely on a prof ected relationship between_home size and system demand/impact can provide a thirty percent difference. between the bottom and top of the scale. Based on a $1000 mid-range fee, homes falling in the lowest range would pay approximately $850 while homes in the largest range will pay approximately $1150. Engineering staff are currently in the- process of preparing a more formal reporting of this analysis, outlining the process of data collection and analysis, comparing the Efland report and outcome with the OWASA study, noting the problems ofcollecting Efland data and shortcomings in that data, etc. That report will be submitted to the BOCC later in March: A simple chart summarizing the relationship between water use and home size is attached to this memorandum. If j-may provide additional information at this time, please advise. . 8 MO8tLE HOMES 4139 LESS THAN 900 3774 901 -1200 4030 7% 1201 -1500 4572 13y, 1501 -1800 472fi 3~/, GitEATF_R THAN 1800 5050 7y, F(CsURE 2 6000 . i x 5000 o r= x~ y aoen x 0 U 3000 z ` 0 f W ~ U' a a W 1000 0 0 200 400 600 800 100D 1200 1400 160D 1800 2000 HEATEb S4liARE BEET i