EID Sewer Rates
“SKY-HIGH” EID SEWER RATES:
EID’s "reported" 2011 Residential Sewer rates of
$777 annually are $260 per year/ 50% HIGHER than the $517 annual average
for surrounding Sewer districts Auburn, South Tahoe, Folsom and Rancho
Murrieta. (Note: Per EID’s Draft Sewer Rate Models, Residential
EID Sewer rates are even higher than the $777 disclosed in EID’s
“The
Waterfront”… at $847 annually).
PROPERTY TAX REVENUES/RATE
SUBSIDIES:
Counting $4.16
million of Property Tax revenues/rate
subsidies ($202 per customer annually), EID’s “All-In” (i.e. Property
Tax-inclusive) Residential Sewer revenues/rates are 89% HIGHER than the
four above surrounding districts.
DISPROPORTIONATE
DEBT COVERAGE RATIOS:
EID’s
Draft Rate Models for
2011-2015 invalidly utilize favorable Sewer Enterprise Fund debt
coverage ratios to offset unfavorable Water Enterprise Fund debt ratios;
this violates Proposition 218 proportionality requirements.
To correct the invalid use of Sewer Enterprise Fund debt ratios to
subsidize Water Enterprise Fund debt ratio shortfalls, THE 15%
2011 SEWER RATE INCREASE MUST BE ROLLED BACK IMMEDIATELY.
NON-ALLOWABLE COSTS IN SEWER RATES:
EID’s Residential Sewer rates further include $6.5
million of costs that are not allowed under
Proposition 218:
-
>$1.0 million of faulty cost allocations for Overhead
-
$0.5 million of annual subsidies to Recycled Water rates/customers
-
$5.0 million annual interest on Debt for “future customers” (i.e. 6% interest on $83 million of currently unused Wastewater treatment capacity)
FAULTY COST
ALLOCATIONS:
EID’s Overhead, Recycled Water and
“future customer” Debt cost allocations violate Proposition 218
proportionality requirements. EID’s
Property Tax allocation policies should be changed to cover “future
customer” Debt costs. Additionally, to correct for
faulty Overhead
and Recycled cost allocations, Sewer rates should be decreased $72 per
residential customer.
TERTIARY TREATMENT:
EID validly points out that mandated tertiary treatment requirements
cause EID’s rates to be significantly higher than Sewer districts not
subject to tertiary treatment mandates.
Yet, EID’s incremental tertiary treatment costs cause approximately $200
of incremental rates annually, materially less than the $266 included in
EID rates for “future customer” Debt Service costs and Recycled Water
subsidies.