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3:07 AM Fri, Dec. 14th

Chino Valley council to tackle water/wastewater rates

The Chino Valley Town Council will consider if it wants to raise its water and wastewater buy-in fees at its June 10 or 24 meeting.

This is one of the proposals included in the five water and wastewater rate plan scenarios Economists.com prepared for the town in its 2010 Water/Wastewater Rate Study. Ron Grittman, town engineer and Public Works director, reminded the council at its study session Tuesday that it hired Dan Jackson of Economists.com in December 2009 to do the rate study.

At Jackson's March presentation, the council asked him to add a fifth scenario, which is included in the final rate study. That scenario calls for no buyout of Fann's interest in the wastewater treatment plant, forming one improvement district and not financing the reserve or contingency funds.

Economists.com, he said, used four primary assumptions for all five rate plan scenarios. They include: personnel and operating costs increasing 3 percent to 5 percent a year; costs of chemicals, electricity, insurance, etc. to increase at higher rates; the rates for the next decade include no cost for significant capital improvements; and buy-in fees to cover annual operating costs for water will increase to $4,000, while wastewater fees will increase to $6,000.

Grittman said the town's current water buy-in fee is $500, and the wastewater buy-in fees are $4,980.

The new buy-in fees to both systems are essential to make the rate plans in the five scenarios work, he said.

The first three scenarios show the town buying out Fann's interest in the town's wastewater treatment plant, while the fourth one doesn't. Currently, the town pays Fann $21 per wastewater account per month and $4,000 of each wastewater buy-in fee for constructing and operating the wastewater system.

Jackson estimates the town can buy the Fann system for about $5.5 million with an additional $2 million to expand the wastewater treatment plant from 500,000 gallons per day to 1 million gpd. This would result in an annual payment of $525,703, he said.

Scenario 1 for residential water rates calls for the current minimum charge for a three-quarters-inch meter to increase this year from $4.84 to $7.84. The residential wastewater rates would increase this year from $48.40 to $55.66.

Scenario 2 for residential water rates calls for the current minimum charge for a three-quarters-inch meter to increase this year from $4.84 to $7.84. The residential wastewater rates would increase this year from $48.40 to $50.34.

Scenario 3 for residential water rates calls for the current minimum charge for a three-quarters-inch meter to remain at $4.84 through 2011. The residential wastewater rates also stay at $48.40 through 2011. Grittman said under this scenario the town can complete the Fann buyout without any rate increase. However, it would require the adoption of the new water and wastewater buy-in fees.

Scenario 4 for residential water rates calls for the current minimum charge for a three-quarters-inch meter to remain the same at $4.84 through 2011. The residential wastewater rates increase from $48.40 to $51.35 this year.

Scenario 5 for residential water rates calls for the current minimum charge for a three-quarters-inch meter to remain the same through 2011 at $4.84. The residential wastewater rates increase from $48.40 to $51.35 this year.

Grittman said the big difference between Scenario 4 and 5 is that the town won't create any improvement districts in Scenario 4, while creating one improvement district in Scenario 5.

Grittman said the town must revise the rate plan if any of the following five assumptions change. The assumptions are: Forecast growth not achieved, there is a delay in the establishment or formation of the IDs, buy-in fees are not set at the levels outlined in the study, there is a greater need for capital improvements and there is a higher price or different terms for the Fann buyout.