City proposes increase in water, sewer rates

Charlottesville’s water and sewer rates for consumers are proposed to rise only nominally next year, even though the Rivanna Water & Sewer Authority is set to increase sharply what it charges the city government.
According to figures released Wednesday, the average city household water bill is proposed to go from $32.92 to $33.33 per month, an increase of roughly 1.25 percent. The average household sewer bill is projected to increase from $30.57 to $31.77, an increase of 3.93 percent.

Water and sewer bills for Charlottesville retail customers are set to go up slightly more — the average water bill would go from $45.97 to $46.57 per month, or 1.31 percent more, and the sewer bill would rise from $42.57 to $44.30, or 4.06 percent.
In February, the RWSA proposed that Charlottesville’s wholesale water and sewer rates — which is what the local government pays to the authority — increase next year by 7.83 percent and 13.3 percent, respectively. Authority officials at the time said the rate increase is partly a result of decreased consumption.

But factors such as increased water use at the University of Virginia — the city’s largest customer — and funds taken from reserve prevent most of the wholesale rate jump from being dumped on city customers.
Charlottesville Finance Director Bernard Wray said the city will pay the RWSA about $4.7 million for water next year out of its total water budget of roughly $9 million. The water budget includes money set aside for infrastructure repairs, operational expenses and other purposes.
“We have a little more total volume than we were expecting,” Wray said, noting that the overall increase in use helps generate the revenue the city needs to pay the water costs.

Conservation, in this case, could have prompted the city to increase the water rate further, because the city would need to generate the same amount of revenue.
“It is [good], but that doesn’t mean the rate’s going down,” Wray said, referring to water conservation.
If approved next month, wholesale rates for Charlottesville would rise from $2.28 per 1,000 gallons of water to $2.46 per 1,000 gallons, and sewer charges would rise from $2.46 to $2.79 per 1,000 gallons.
“There’s a conundrum for services like that, where there’s fixed costs and a commodity that’s sold,” Councilor David Brown said. “But I think the net result is that if people conserve water, they’ll pay less overall.”

The proposed rates assume that retail customers, average households and conserving households use about 7,480 gallons, 5,150 gallons and 2,000 gallons, respectively, of each water and sewer per month. The City Council will discuss next year’s utility rates at its May 18 meeting, and the new rates would go into effect July 1.
Sharon O’Hare, the city’s assistant finance director, said there has been a water consumption decline of about 2 percent among city customers as a result of conservation efforts. But the increases at UVa offset that trend, which in turn resulted in a smaller rate hike.
“Their increase overshadowed the decline from everyone else,” she said.
University figures show that water usage has been on the rise since 2006, but usage declined from 1999 to 2005. The city expects to purchase more water from the RWSA next year because of UVa’s augmented consumption.

The city is planning to use $200,000 in reserve funds to help cover the water and sewer costs and to keep the rates from increasing more. Factoring in that expenditure, $400,000 would still exist in reserve for both utilities.
The city’s gas rate, which is actually proposed to decline by 1.13 percent next year, also would get $400,000 in reserve funds, which would lower the average household bill by $1.44 each month.
The city’s utility rate report points out that natural gas wholesale prices have been extremely volatile this year. In March 2008, the average area customer was paying $145.91 per month, but as costs dropped, the average bill fell to $107.27 a year later. Next year, the average bill would decrease to $106.06.