FOR IMMEDIATE RELEASE:
2016 Wastewater Rate Increase Necessary for Continued Infrastructure Growth
Rate Increase Will Maintain and Proactively Upgrade Wastewater Infrastructure
The Lebanon City Council has approved a 32% wastewater rate increase for Lebanon Utilities customers. That increase – the first since 2005 — goes into effect January, 2016. For residential customers, that is an average monthly rate increase of slightly more than $11.
Mindful of recent water (2009) and electric (2012) increases, the wastewater rate increase was delayed as to not burden Lebanon residents and business owners. However, since 2005, inflation has increased 25% and the consumer price index (CPI) for utilities by 65% nationally. In addition, utilities have experienced increasing costs of environmental requirements while projecting spending $4.7 million for infrastructure upgrades and repairs through 2022.
Since 2011, Lebanon Utilities revenues have not covered yearly expenses, and the utility has been forced to dip into reserves to cover rising costs.
Among those rising costs has been the Payment in Lieu of Taxes (PILOT) program that increased from $40,000 per year in 2010 to over $214,000 per year in 2015. PILOT is allowed by the State and sets a formula for entities like Lebanon Utilities to pay to the city the equivalent of what a private business would pay in taxes (for land and improvements as well as equipment).
“In the past, this has been a financially prudent approach. However, that number has increased from $40,000 in 2010 to more than $200,000 in 2015. If the City was not collecting this annual amount from the utility, our wastewater rates could be reduced by approximately six percent,” said Lebanon Utilities General Manager Jay McCoskey.
Lebanon Utilities assessed options to reduce the projected rate increase to customers. Through their review, staffing efficiencies/reductions were identified, as well delayed spending. Moreover, Lebanon Utilities also was able to reduce the needed original relief percentage from 40% to 32%.
“It is our desire to keep our community vibrant and facilitate the ability for future growth,” said McCoskey. “We understand the trust placed in us by the community to maintain our facilities and process waste in an environmentally responsible manner. This increase will allow us to do that.”