North Royalton City Hall

The five-year sewer rate study was presented Nov. 20 and includes a proposal to not only restructure the rates, but to increase them modestly, officials said, beginning in 2019, with a monthly fixed charge to be instituted beginning in July to better offset maintenance and capital costs moving forward.

NORTH ROYALTON – Results of the five-year sewer rate study have been released and does include a recommended restructuring of the rates as well as increases beginning in 2019 to better cover capital and operational costs into the future, officials said.

At the request of Ward 6 Councilman Dan Kasaris, city council opted to postpone adopting the proposal, which was presented Nov. 20 during a special finance meeting, to allow for public participation during the Dec. 5 council meeting at 7 p.m.

After analyzing wastewater operating costs, which are expected to increase from $4.6 million this year to $7.05 million in 2022, capital improvement needs and current rates in North Royalton and surrounding cities, the study, conducted by Raftelis Financial Consultants, does recommend MCF rate increases beginning primarily in 2019 and the institution of a $5 monthly base charge to help offset maintenance and capital costs beginning next year, a structure similar to how the Northeast Ohio Regional Sewer District bills.

“We need to make sure we have adequate reserves to address any needs that come up in a reasonable fashion,” said Joseph Crea, manager at Raftelis, who told council that as an enterprise fund, the utility should run like a self-supporting business.

Though a significant amount of money has been reinvested into the wastewater plants’ aging infrastructure over the years, there are still modernization needs remaining.

“We still have $1-$2 million a year in capital needs that we need to reinvest into the plant. That’s what’s driving the increases,” Finance Director Eric Dean said.

Royalton residents are currently paying $84.71 per 1 MCF.

Two alternative rate scenarios were presented, with the first being recommended and what council will be voting on, which includes a decrease of the 1 MCF quarterly rate beginning July 1 to $79.29 and the addition of a $5 fixed monthly charge for a total of $94.29 at 1 MCF quarterly from July on; in 2019, a proposed rate increase by 4 percent to $82.98 plus the fixed $5 monthly charge, for a total of $97.98 quarterly; in 2020 a 4 percent increase to $85.43 and the monthly charge increases to $6 for a total of $103.43 quarterly; in 2021, an increase of 3 percent to $87.09 plus the monthly charge increases to $7 for a total of $108.09; and in 2022 a 3 percent increase to $88.83 and the monthly charge increases to $8 month or a total increase of $112.83 quarterly. Residents should note they are now billed monthly and these are quarterly estimates, and each household may use more or less MCFs.

The second scenario included higher MCF rates but a lower fixed monthly charge but was designed to generate the same amount of revenue ultimately.

As part of the rate scenario being considered, the city has opted to do away with the 1 MCF minimum requirement so those who use less than 1 MCF per quarter, mostly seniors and single households, will see a decrease in their bill. For example, a household that uses .6 MCFs a quarter, the bill would go from $84.71 currently, down to $62.58 next year, to $64.79 in 2019, $69.26 in 2020, $73.25 in 2021 and $77.30 in 2022. These rates do include the fixed monthly charges. Those who vacation elsewhere in the winter, snowbirds, would only pay the fixed monthly charge, so $8 per month in 2022 in the winter when they aren’t using water and sewer. If things were to remain status quo, these same residents would be projected to be paying $97.20 quarterly in 2022, as a comparison, even if they weren’t using water.

Well-water users will also see a decrease from the 2.5 MCF estimate a quarter down to 1.2.

“These users do not have a meter, so the city had been using a quarterly estimate from the ‘90s. The city average is 1.2, so we lowered theirs to this. There are only 45 accounts in the city where this applies,” Dean explained.

Those residents who live in the C District under the Northeast Ohio Regional Sewer District will see an increase that mirrors the rest of the city, however, the NEORSD has a higher rate so the city will continue to pay the difference for those homeowners as it does currently.

As part of the presentation, Crea compared North Royalton rates to its neighbors.

Even with the increases, officials said North Royalton rates are lower and will be lower than several neighboring NEORSD communities whose suburb rate per 1 MCF will be $89.60 in 2018 with a monthly NEORSD base charge of $4.95, according to the NEORSD website. Plus, officials say, there is an additional charge usually levied on residents’ property taxes for the cleaning and maintenance of the sewer lines in those other communities. The NEORSD rates are increasing 8.3 percent annually through 2021.

North Royalton has been playing catch up when it comes to sewer rates. From 2000 to 2008, rates were never increased and the wastewater department was operating in a deficit.

“The general fund was subsidizing or lending money to wastewater to show a balance because prior administrations ignored wastewater funds,” Kasaris said.

“And they were using future capital investment to cover that. Three of the funds were in the red,” Mayor Bob Stefanik added. “By stabilizing our rates and investing in wastewater infrastructure, we are well positioned moving forward and won’t experience large rate increases in the future.”

This administration and council analyzed rates and increased them each year in 2012 to 2017 to begin operating in the black while also addressing capital needs.

“We had to do things five years ago that we don’t have to do now. That set us up to get a lot of the improvements paid off, that debt, and get the cash flowing the right way,” Council President Larry Antoskiewicz noted.

Ward 3 Councilman Dan Langshaw called the proposal a fairer system.

“What is being proposed, I believe, will help reduce costs for seniors, those on a fixed income, well-water users and provide a fairer system for our rates for all, while keeping North Royalton’s sewer rates one of the lowest compared to other cities in our area that tack on additional charges that most aren’t aware of,” he said.

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