Geneva looks at future costs of water, sewage work
The Geneva City Council this week got the first of three lessons from a consultant about what it costs to run its water and sanitary sewer systems.
The Municipal and Financial Services Group of Annapolis, Md., studied what it costs to run Geneva’s systems, consumption trends and charges. The result: What Geneva currently charges won’t cover what the consultant thinks the city ought to be spending to keep the system in good working order in the next 10 to 20 years.
The goal is to have stable rates and fees that fully recover the costs, said David Hyder, vice president of the firm.
Geneva’s water consumption has declined for several years, mirroring a national trend, Hyder said. It is due in part to the economy, as businesses close or use less water. But it is also due to conservation efforts, including the replacement of high-volume plumbing fixtures with low-flow ones, he said.
And Geneva is in an “age of renewal,” as components of its water delivery and sewage system are reaching the end of their projected useful life.
The presentation showed when much of the water and sanitary sewer pipes were put in, of what they were made, and their expected life span. For water pipes, the firm assumes a useful life of 75 years, except for the pipe laid in the 1950s. Poor materials and poor workmanship used in that decade has resulted in only a 50-year life span, said Tracy Moher, a senior consultant at the firm.
“Thirty-five percent of your buried water lines are theoretically at their useful life,” she said.
Twelve percent of the sewers are at that point.
The city should plan to spend from $800,000 a year in 2013 to $1 million a year by 2023 to replace the water pipes, and $250,000 to $300,000 a year on the sewers.
Hyder also discussed the city’s policy of including a year’s worth of debt payment in its water/wastewater fund reserve. Typically, municipalities don’t do that, he said, keeping only a 90-day supply of operating costs. A large part of the debt comes from building a new water treatment plant several years ago.
Of water customers, 90 percent are residences; they use 64 percent of the water, about 791 cubic feet per household per month.
“Where we really see you falling short is the current rate structure in terms of the fixed-rate charge,” Hyder said. The fixed monthly charge applies to customers no matter how much water they use, on the theory that it costs the city to make water available, with its pumps, treatment center and pipes, whether you use a drop or a barrel of it.
It was the first of three presentations on the study. The second will cover how to allocate costs to classes of customers, and the third will go over recommended rates and a financial plan for the city.