If the City of Batavia is going to maintain its aging water infrastructure, there will need to be a series of rate increases over at least the next five years, the City Council was told tonight.
The city needs to make about a $4 million investment in the coming years, said Stephen C. Waldvogel, a consultant from Consestoga-Rovers & Associates out of Buffalo.
"Running a water and sewer utility in today's economic climate is growing increasingly difficult," Waldvogel said. "There are numerous challenges associated with running a water and/or with a sewer utility, particularly in the northeast. One of the prevalent problems throughout the northeast, which the city is facing right now, is aging infrastructure. Your water plant was constructed about 100 years ago. Your wastewater plant was about 30 years ago, and most of the pipes in the ground are 50 to 100 years old."
Failures are inevitable and residents face potential service outages without improvements.
Waldvogel suggested the city institute a five-year plan of rate increases -- the average rate would go up less than $1 per month each year (2.5 percent per year), plus institute a $1-per-quarter fee to pay for infrastructure improvements ($3 per quarter by the fifth year).
"This fee would be dedicated solely to making those improvements so that you can demonstrate more clearly to your residents, or your constituents, that you're getting value for this investment," Waldvogel said. "We're not going to take this money and move it somewhere else. You're going to pay this fee and we're going to put it right back into your infrastructure. You can talk to them about the projects that this fee is paying for."
If the council were to move forward on Waldvogel's suggestions, there would be a public hearing as part of the upcoming budget process.
The city cannot enact a five-year fee increase plan, but it can start with a scheduled two-year increase in 2010, which then could be renewed every two years as needed.
Waldvogel stressed that over the course of five years, the need for the fee could change.
City Council President Marianne Clattenburg said after the meeting that a plan such as Waldvogel presented is probably necessary.
"This is exactly what I was talking about when I said we are going to have to start setting priorities and moving forward with future plans," Clattenburg said. "The city is in need of reconstruction in certain parts of our water and sewer system, so I think this was a very comprehensive, well-thought-out, reasonable study as to how we're going to go where we need to go in the future."
Waldvogel listed six challenges facing the city and its water service:
- Aging infrastructure
- Potential declining service levels
- Escalating operations and maintenance costs
- Declining consumption
- Reduced funding options
- Previous large rate increases
Part of Waldvogel's gradual rate increase plan is to avoid the sticker shock on consumers of a spike in rates, such as the 2008 rate increase. Prior to 2007, the city hadn't increased rates in four years.
As for declining consumption -- that's largely a result of people buying more efficient washers, toilets and other water devices. The city saw an 8-percent decrease in water usage last year and an 13-percent decrease over the past four years. Waldvogel's study didn't go back further, but he said he's confident that's a long-term trend.
Declining consumption means less in water fees collected.
At the current rate of rising costs and decreased revenue, he expects operational deficits beginning this year to reach $600,000 a year by 2014, unless something is done.
As for sewer, Waldvogel said that system is in better shape financially and he sees no reason for sewer-rate increases over the next five years.
Some of the charts from tonight's presentation after the jump:
