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Consultant flags fixed-charge design and sewer cap as drivers of under-recovery
Summary
NewGen's presentation highlighted that fixed charges and sewer capping practices likely leave wastewater under-recovered, and the firm urged the council to consider structural rate changes in a separate, deeper analysis rather than combining those changes with an immediate rate increase.
The NewGen presenter told the council the city’s current rate structure — including fixed charges that bundle a baseline volume and capping on sewer bills — likely prevents wastewater from fully covering its costs.
“That 0 to 5,000 gallons in that fixed charge… is not included,” Richard said during the presentation, arguing the fixed charge as currently priced does not cover the cost of the included baseline volume. He recommended not changing both structure and rates simultaneously because structural changes are data-intensive and could complicate public acceptance.
On sewer billing, the consultant explained the city uses winter 0.25 averaging to estimate domestic sewer usage and said caps on sewer charges blunt price signals and contribute to under-recovery. The presenter said the council should re-examine minimum charges, how much baseline volume to include in fixed charges, and whether to move away from caps to better match costs to customer classes.
Council discussion focused on trade-offs between affordability and cost recovery, with members asking staff to bring back data on alternatives and their distributional effects before pursuing structural changes.
