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
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.
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)
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.
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.