- The Enterprise
- The Recorder
Three Chesapeake Beach town council members have created an online petition advocating to change from a tier-based utility rate structure to a universal, flat rate.
Council member Valerie Beaudin, one of the three members endorsing the petition, said as just “one elected official,” she needed to use the resources available, including creating the online petition, to “honor public awareness.”
“I need to garner that interest of the public so that they come out and tell us what they want their rates to be,” she said during a phone interview Monday. “The more transparency the better.”
During fiscal 2013 budget discussions, the council could not come to agreement on what the utility rate structure for the town should be. Because of this, the same, tier-based utility rate structure as fiscal ’12 was adopted for the fiscal ’13 budget.
According to the website, www.fairwaterrates.net, which is endorsed by Beaudin and council members Eric Reinhardt and Jeff Krahling, the current water and sewer rates are a weighted, tier-based structure “that benefits users who consume more water — the more water you use, the lower your rate,” causing some low-volume users to sometimes pay 1,000 percent more for water and sewer per gallon than high-volume users.
For both the water and sewer rates, the first 10,000 gallons used is billed at a flat rate. Then, the additional cost for the next 20,000, 70,000, 100,000 and 200,000 gallons used gradually decreases per gallon. Documents for the tiered billing structure can be found on the website.
The website urges residents to sign the petition to “send a message to the council and Mayor that we want universal, flat rates, whereby every user will pay the same per gallon price with no subsidies.”
“A flat rate per gallon use is merely a question of equity or subsidy, and I support equity,” Beaudin said. “I believe the fairest rate structure is pay for what you use. A wastewater treatment plant … is not a for-profit business. Therefore, there’s no motive … for providing subsidies. I don’t believe there should be a discounted rate [for utilities].”
Beaudin said solving the issue of the water and sewer rates was one of the issues she was concerned with most during the most recent campaign for town council, which she made known to the public. The results of the election last November, she said, showed the issue also was one of concern to the residents.
Krahling said he supports the “informational petition” because discussions on the utility fund are approaching and “we had to let people know what’s happening.” He said town residents have been unaware “for the last 25-plus years” that a tier-based structure has been in place and “the public has a right to know that they’re paying the bill for high-end users.”
The flat rate structure, Krahling said, is the best utility rate structure for the town “because everybody will pay for what they use, and you won’t get a discount for high use.”
Mayor Bruce Wahl said he first learned of the petition March 1 in an email from Krahling “that said don’t be surprised to see signs about fair water rates coming up around town.” Wahl said he noticed signs in yards that same day that said, “Want Fair Water Rates?” with a telephone number and a web address on it.
“I was surprised to hear that these three had decided to start waging a campaign, because nothing at that point on rates had been proposed,” Wahl said Monday morning. “It almost, to me, looks like a political campaign … and I don’t even understand the motivation for this. It certainly doesn’t sound like teamwork to me.”
The flat rate structure would not be appropriate for the town, Wahl said, because it is not sustainable, fair or equitable. Wahl said he does not agree with creating the structure as Beaudin, Krahling and Reinhardt proposed, which essentially would shift the “burden of the system to the commercial users.”
The 2,000 residential, low-volume users pay “low dollars” and the 200 commercial, high-volume users, such as the wastewater treatment plant and the Chesapeake Beach Water Park, pay “very high dollars by comparison,” Wahl said. “The argument that it should be a flat rate per volume with no consideration given to the cost of delivering the service itself” would cause the high-volume users to pay “an astronomical amount and a disproportionate amount of money” and low-volume users to pay just slightly less than they do now, he said.
Wahl sent a letter March 4 to all utility ratepayers in response to the online petition. In the letter, Wahl states he has been unable to garner support from the majority of the council “for any reasonable proposal,” so Jean Holloway was hired to develop an appropriate rate structure for the town.
Wahl first made public his intent to hire Holloway, who works for the Delaware Rural Water Association, during the January town council meeting. She was part of the utility rates committee established to come up with a rate structure for the town, which the council ultimately did not agree with and did not adopt.
In the March 4 letter, Wahl states that Holloway’s work has recently commenced, the results of which will expectantly be seen in a few weeks. “And now, we have three council members who appear to be unwilling to hear the consultant’s recommendations in the search for a reasonable solution,” Wahl states in the letter.
The timing for the council to “start a campaign” about the utility rate prior to hearing a proposal from Holloway is “inappropriate,” Wahl said.
Also in the letter, Wahl said the current rate structure disqualified the town for a lower interest loan to finance the recently approved Enhanced Nutrient Removal upgrade to the wastewater treatment plant. “Nevertheless, the Town is obligated to upgrade the plant, it will simply cost us more in interest,” he continues in the letter.
Beaudin said the rate structure should be adjusted to finance the upgrades and improvements.
Prior to 2008, an “artificially low rate structure” was maintained by capital connection fees received from new homes, but declined “when housing starts slowed to a crawl,” Wahl states in the letter. “With this decline, and the inability to get a new rate structure approved by the Town Council, the Utility Fund’s reserve is likely to go below zero this year. This is completely unacceptable, and must be remedied.”
Beaudin said using the capital connection fees to subsidize the utility rates has not been “a good model” for the town and “goes against any accounting principal you can imagine.”
“There’s a reason they call it capital connection fees,” she said. “They should be used for capital expenditures, not to subsidize our rate structure.”
Town resources need to be managed properly, Wahl continues in the letter, which does not include “attempting to subvert the process of governance by inciting unrest among our rate payers.” In the letter, Wahl states that “‘feel good’ proposals” are not in the best interest of the town if excellent water and sewer rates “we now enjoy” cannot be sustained.
“I’m very disappointed that these three council members are taking this position,” Wahl said. “I had hoped that we would have better unity amongst the council this term, but this is not looking favorable.”
Calls to Reinhardt were not returned by time of press.
A utility fund work session, which the public can attend, is scheduled for 7:30 p.m. Monday, March 25, at the town hall.