New Coalition Issues List Of 5 Demands For Immediate MSD Rate Reductions
Advocates are calling on Hamilton County leaders to immediately lower rates for the Metropolitan Sewer District. The newly formed Fair Sewer Rates Coalition includes organizations like Communities United for Action, the Sierra Club, and League of Women Voters.
The group says commercial and industrial customers get unfair discounts while residential ratepayers shoulder the burden of financing federally mandated repairs to prevent sewer backups. They have five demands for county commissioners.
"We want them to realize that we are more than numbers or stats on a piece of paper — we are real people," said CUFA member Wanda Bell. "We are real people that have entrusted our homes. We have entrusted our families, and we have even entrusted our lives into their care."
Commission President Stephanie Summerow Dumas says the board of commissioners has implemented a majority of previous recommendations, including monthly billing and a customer assistance program for low-income seniors.
“We will continue to be proactive to help homeowners who are struggling and we are actively helping thousands of renters with rent and utility bills through federal funds found on our 513Relief.org site," Summerow Dumas said in a statement.
MSD Director Diana Christy says they are undertaking a holistic review of the rate structure this year, "Including an evaluation of the minimum base charge, two-tier rate structure for water usage, and a potential new impervious surface charge."
First Demand: Immediately Reduce Base Rate Charges
Base rates are the minimum on every customer's bill. It's about $39 for most residential customers, and it includes the first three units of water (calculated as cubic feet of water: 1 CCF = 100 cubic feet or 748 gallons).
About 40% of residential customers, between 70,000 and 75,000 households, only pay the minimum base charge, meaning they use less than three units a month.
A memo from County Administrator Jeff Aluotto to commissioners this week says MSD's 2021 rate study includes an analysis of base rate charges to determine the impact of changes on overall revenue.
"Residential ratepayers are subsidizing the big water users [in] two ways," said Bob Park, member of the Sierra Club, Miami Group. "There's a high minimum charge, which means a lot of people pay a sewer charge based on more water than they actually used; and by a 20% discount that the big guys get the commercial industrial and institutional water users."
Second Demand: Eliminate 'Bulk Rate Discount'
Customers are charged $5.879/CCF up to 50 CCF; anything above that is charged at $4.701/CCF, or about 20% lower.
The top 25 users are paying the higher rate on less than a tenth of one percent of their water usage, according to a data analysis from the coalition. Advocates say this costs MSD between $15 million and $25 million a year.
MSD Director Diana Christy says the lower rate isn't actually a discount.
"The two-tier rate structure is designed to recover certain fixed costs in addition to water usage in the first volume block and only water usage in the second volume block," Christy said in a written statement. "The fixed costs recovered in the first volume block (3 CCF to 50 CCF) relate to handling a certain portion of the water that is not directly contributed by customers."
Christy also says commercial and industrial customers often pay a larger minimum base charge and have to pay surcharges and pre-treatment charges.
Aluotto says the rate structure has been in place for decades and will be analyzed as part of the broader "restructuring" effort.
The Fair Sewer Rates Coalition is recommending a rate structure they say is revenue-neutral; it would reduce the base charge to $8 a month and increase the per-unit water charge to make up the difference, and require the same rate regardless of water use amount. About 90% of single family residence customers would see at least a small reduction in their monthly bill, as much as 80% in savings for some.
Third Demand: Fund Consent Decree With Impervious Surface Charges
Impervious surface charges fees generally focus on property owners who have parking lots or other surfaces with water-resistant materials like asphalt or concrete. During heavy rain events, water overflows from these areas into the sewer system, which then has to be treated.
"Many cities are under consent decrees to fix this problem," Park said. "Other cities have covered the costs of upgrading stormwater infrastructure by collecting stormwater fees — fees that reflect the cost of stormwater removal, which is related to property area and the nature of the surface. Such a fee would substantially reduce the sewer charges on small properties, both residential and small business."
Aluotto says this issue is being examined now, and MSD is expected to bring recommendations to commissioners this fall. He says it would take 16-18 months to approve rate schedules, integrate billing data, conduct a public outreach campaign and develop other related programs, policies and processes.
Fourth Demand: Financial Incentives For Stormwater Abatement
"There are all kinds of things that can be done," Park said. "Getting drainage to streams, getting streams out of sewer pipes, making ponds, bioswales, rain gardens, rain barrels, lots of different options for different size properties."
Aluotto says a potential impervious surface fee would include financial incentives to reduce impervious surface areas.
Fifth Demand: Expand Customer Assistance Program
MSD implemented its Customer Assistance Program (CAP) in 2019 as one of the recommendations from the Rate Affordability Task Force, created in 2015.
Eligible customers get a 25% discount as part of the program; 1,932 customers are enrolled.
The program is limited by state law, which allows reduction in rates "for persons who are sixty-five years of age or older" and qualify for the homestead exemption or qualify as "a low- and moderate-income person."
The Board of Commissioners can't expand the program to low-income customers under age 65 without a change in state law. MSD's own eligibility requirements limits the program to seniors living in a home they own, excluding renters.
Roy Davis says he's among 42,000 renters in Hamilton County who pay their own water bills.
"As a low-income senior I should qualify for the Customer Assistance Program (CAP), but I do not," Davis said. "We senior renters that pay our sewage bill deserve to be included in the customer systems program immediately. Right now."
MSD Director Diana Christy says it's true state law does not prohibit them from expanding CAP to renters that otherwise meet the eligibility requirements.
"The program was initially established for low-income seniors who own their home, and not renters, because it could be implemented under existing billing practices," Christy said in a statement. " There are significant challenges to including renters … related both to eligibility criteria (e.g., determining who is responsible for utility costs, landlord or renter) and current MSD billing practices, which make the property owner the responsible party. For these reasons, it was not recommended to include renters in the CAP when it was developed. Like the other suggestions, we are reviewing this option."
Read the full memo to commissioners below: