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Home My WebLink About1967-12-11 29-V ORDER39-V Introduced by Councilor Baldacol, Oec, 11, 1961 CITY OF BANGOR (TITLE.) f®Cb¢C Accepting Report sewer nates By the CNy (an nofl Of GUY ofBuyyor. ORDERED, T116T In accordance with Order 0169-U, the City Council accept the report of Little, Gray 6 Horton relating to sewer rates. opw _LJvCD "- - 1267 IEC -7 'M 5:01 CITY CLERK'S OFFICE .I CF re ullde. mtm IN CITY COUNCIL Dec. 11, 1967 PASSED CIEE 29-V 0RO ER rine, ..?:cPPFi^9. report, c. sower. npcee,..,,. .....................................• Introduced and rued by councilman Xan GG.A liW C.PA, Culp Gnv. e,. Ydwlm R No.wu, k.M9A City Council City of Bangor Bangor, Maine Gentlemen: LITTLE, GRAY & HORWX Cooftel P,Mw .M&mmamw w 814maA, Nuu Aon mdp sw 3 5 November 38. 1967 pursuant to request we have prepared the following exhibits reflecting estimated annual revenue to be earned at the proposed rates to be charged users of the sewer system in the City of Bangor: Exhibit A . . . . . . . . . pro Forma Income Statement Exhibit 3 . . . . . . . . . Estimated Annue_ Billing Exhibit C . . . . . . . . . Consolidated Meter Readings Exhibit D . . . . . . . . . Billing Ra tea Determination of Estimated Use and Revenue Analysis was made of all meter readings by the Beazer Water District for the most recent twelve-month period. Tabulation and pricing of these readings produced results consistent with the District's reported revenue. Slight variations were attributable to partial billings not utilized in the survey. Number of bills and total consumption within specified limits are set forth in Exhibit C. Analysis of the District's service area indicated certain areas not presently served by City sewers. Readings from tiese areas were eliminated from tSe totals in Exhibit C. Monthly bills and readings including the conjunctiva Air Force billings were converted to a quarterly basis and also included in Exhibit C. Amounts so determined were priced up in Exhibit E according to the proposed rats presented in Exhibit 0. Based on the present annual use of water in the City, revenue of $493,846 can be anticipated at the proposed rates. Relation To Water District Readings: No provision hes been made in the Exhibits for reductions to customers who may discharge only a portion of their water intake into the City sewer. The total amount is believed to be quite small and should be offset by two commercial customers not now served by the District. Nor has provision been made for a sewer rate to cover additional tenants in buildings served by a single water and sewer service. mere appear to be 2,952 such customers in areas served by the City sewers. Water District c.arges to this group amount to $35,424. This type charge was formerly used quite widely by water utilities in Hain to ease the change from flat fates to meters but new appears to be phasing out. The proposed rates compensate for this by the higher minimum and the addition of a short second step of 3,600 cubic feet. This step is also designed to take into account those customers having a somewhat heavier use on the system by garbage disposal units. Following is a comparison with Water District rates: Cubic Feet Nater Sewer 0 - 1,200 $ 6.00 $ 8.40 1,200 - 4,000 .22 .33 4,000 - 21,000 .22 .20 21,000 - 150,000 .20 .22 150,000 - 11500,000 .14 .15 Excess .30 .11 While there is no necessity that there be any relationship in the two rates, either in the meter steps or in the charges, it does seem prudent to maintain a reasonable relationship since both are billed from a common source of information. It is also noted that the percentage of operating expenses to total expenses is quite similiar in both instances. _2_ Annual Revenue Requirements: Pro forma income and expense totals are presented in Exhibit A. This assumes a full years revenue at the proposed rates and normal consumption. Operating expenses contemplate full operation of pumping stations and treat- 7 Some adjustment will probably be necessary to laundries and others where from 1050 to 1967 per records of the City engineering department plus 1% on there may be a great deal of steam. The rates also provide for adjustment due 7 lawn and use upon application. These should not affect the estimated to garden debt of $2,272,640 the annual amortization requirement is $124,920 7 revenue projections, however. Ila tea for willingness to serve on property abutting on severed streets would have a neglible effect on revenue. Annual Revenue Requirements: _1- Pro forma income and expense totals are presented in Exhibit A. This assumes a full years revenue at the proposed rates and normal consumption. Operating expenses contemplate full operation of pumping stations and treat- ment plant. Depreciation iscomputed at 1% on the cost of mains installed from 1050 to 1967 per records of the City engineering department plus 1% on construction and a composite rate of 4% on buildings, machinery mains under and equipment. No provision is made for depreciation on the Federal and State shares of the Kenduskeag Stream Interceptor Project On present oustanding debt of $2,272,640 the annual amortization requirement is $124,920 sewer 7 thorough 1977. Interest for 1968 is $86,768, and declines about $4,700 per year. Restatements will increase by an estimated $80,000 per year on completion lof Stage 11 along the Kenduskeag. At its reported present rate of discharge ] into the stream, it is estimated that the Maxfield Pill would be charged $12,800 per year redacing annual additional requirements to about $61,500, l 1 considering the p es_nt es -mated net income. This would indicate an increase c 7 in rates of about 12%. Within this period, however, if is expected that Dow Field and related housing will be converted to other uses. Under the present J conjunctive billing these units will average only about 12q per 100 cubic feet. _1- Under present plans for the area the average revenLe would probably be at least twice this amount although the agree might be reduced. The City Engineer's report of February, 1966, contemplated additional revenue from this area of about 25% or $10,500 at the proposed rates. Billing Procedure: The Bangor Water District bills most customers on a quarterly basis, approximately 1/3 rd. each quarter. A few large customers including the Dov group are billed monthly. Readings start about the 20th of the preceeding month are are completed by the 20th of the month of billing. All bills are mailed on the last day of the month. I£ the proposed sewer rates are to be effective on January 1, 1968, and this date is strictly adhered to, all Initial bills will be for a period less than three months. Those in the first cycle read from December 20, 1967 to January 1, 1960 would receive no bill. The remainder of the cycle would have bills up to a maximum of 20 days. The second cycle would have bills for periods ranging from 20 days to 50 days, and the third cycle from 50 to 80 days. Those in the first cycle read between March 20 and 30 would also have a reduced bill. All subsequent bills would be at the full threewntha rate. The effect on the first years cash flow will be quite profound. It appears that the equivalent of too quarterly cycle billings will be accrued and unbilled at the close of the first year. The entire December 31 billing, $41,000, would be outstanding along with an undetermined amount of previous billing. 4- Administration and Procedures: 1 Early consideration must be given to staffing for the billing and collection 7 procedures. A chart of accounts using the uniform waste water disposal system should be set up including cost values and debt to be transferred to provide for a completely separate accounting system. This would not preclude the continued use of public works facilities and equipment on a rental basis, nor the transfer of personnel to other City departments. Cash should be controlled 1 in the same manner as City general funds. General accounting records might best be maintained by existing City employees until such time as the treatment plant is in operation and personnel and duties clearly defined. Classification l of property for depreciation purposes should be made on completion of the project. m w t It would s e'1 to send a letter to all Water District customers a an early date notifying them of the proposed sawer charges and providing for notification if cloy ,acre not on Citysewers. We wish to express *or appreciation to the City officials and to the ] superintendent and personnel of the Bangor Water District for their cooperation 7 in the preparation of these rates. 17 J 5_ 1 BM'GOR SEWER DEPARTMENT Exhibit A PRO FORMA INCOM STATEMENT Operating Revenue $ 493,846 Operating Expenses: Mai tenanceand Operation - Existing System $ 65,000 Maintenance and Operation - Dov System 25,000 Operation of Stations A Plant 90,000 Customer Accounting and Administration 20,000 200,000 Depreciation 76,500 Debt Service: Debt Retirement $ 124,920 Interest Expense 06,786 211,706 40920' Net Income $ X640 BANGOR GNMR DEPARTMENT ESTIM \TED ANNUAL BILLING Exhibit B Billing Number Total Billing Billing Limits of Cubic On At Block Total Cubic Feet Bills Feet minimum Rate a111ing 0 - 1,200 7,441 $ 62,504.40 $ $ 62,504.40 1,200 - 4,800 16,470 40,426,200 " - 138,348.00 68,185.26 206,533.26 4,600 - 21,000 2,571 21,358,500 21,596.40 30,543.48 25,249.56 77,389.44 21,000 - 150,000 494 25,173,100 4,149.60 5,868.72 22,407.04 32,550.02 64,984.10 150,000 - 1,500,000 57 21,710,800 478.80 677.16 2,585.52 16,176.60 19,741.20 39,659.28 Over 1,500,000 4 36,253,200 33.60 47.52 181.44 1,135.20 8,100.00 33 278.52 42 776.28 27,037 144,921,800 $ 227,110.80 $ 266,736.04 $ 493,846.84 Yj 91NGOR SEWER DEPARTMENT Exhibit C 7 CONSOLIDATED QUARTERLY METER READINGS 1966196667 Cubic Feet Billed 876,800 Cubic Feet 448,800 Neter 2,461,800 Billing Range Site Min. 1,200 4,800 21,000 150,000 4 Bills 441800 21000 150000 115001000 All (later Netera Net rc Sewer Users: 5/8 7,334 37,920,400 10,945,200 050,300 3/4 401301,700 195 2,164,000 3,393,000 1,158,200 22,174,400 1 13,673 88 955,700 4,162,500 4,963,700 1,024,400 1 1/4 21563 2,300 23,100 1 1/2 22 152,900 1,680,300 5,349,500 331,000 2 8 30,900 1,284,900 7,893,700 7,300,100 3 12,300 48,200 2,036,300 5,075,700 4 44,500 92,000 371,500 21404 500 8,036,900 Cubic Feet Billed 41,258,500 21,737,200 22,623,200 15,135,700 No. of Bills 7,647 16,815 2,621 477 49 Not Served By Sewer 5/8 207 817,100 150,700 26,500 3/4 39,300 104,900 No. of Bills 1 6 20,400 91,900 61,500 1 1/2 Total 144,921,800 114,600 134,400 2 25,173,100 8, bill 226,400 F00 3 2.451.81n0 Cubic Feet Billed 876,800 470,700 448,800 2,461,800 No. of Bills 213 356 58 14 4 Net rc Sewer Users: Cubic Feet Billed 401301,700 21,266 300 22,174,400 13,673 900 No. o1 Bills 7,434 16,459 21563 463 so- Monthly Meters Converted To Quarterly Basis 44,500 92,000 2,990,700 8,036,900 So. or Bills 7 11 8 31 12 Air Force Billing - Over 1,500,000 36,253,200 No. of Bills Total 144,921,800 40,426,200 21,358,500 25,173,100 21,710. F00 325 Total Bills 27,037 7,441 16,47D 2,571 494 57 _200 4 BkNGOR STJER DFPARSMENT RILLTNG RATES Exhibit D Ou'rt.erly Cubic Rate per Billing Average Feet 100 Cu. Pr. A,no_n[ Per 100 Cu. Ft. 1,200 .70 8.40 .IO 3,601 .33 11.88 2.80 4,000 1,200 - 4,800 20.28 .42 16,200 .28 45.36 4,800 - 21,000 21,000 .28 65.64 .31 129,000 .22 283.80 .22 150,000 6.48 349.44 .23 1,35C,000 .15 2,025_00 41.48 1xcess00 Excess R 33I� 4.64 .lfi Excess It Monthly 400 .70 2.60 .70 1_200 .33 3.96 1,600 5.76 .42 5,600 .20 15.12 7,000 21.83 .31 43.000 .22 91.60 50,000 116.48 .23 450,000 .15 675.00 500,000 791.48 .16 Excess .11 Short Formula For Conyut_up, Bills 9i11inR Limits Rate let Ade Per 3111 Qaaraaer1 Monthly 100 CuL. . Quarterly Mec_hly 0 - 1,200 0 - 400 Min 8.40 2.80 1,200 - 4,800 400 - 1,600 .33 4.44 1.48 4,800 - 21,000 1,600 - 7,000 .28 6.84 2.28 21,000 - 150,000 7,000 - 50,000 .22 19.44 6.48 150,000 - 1,500,000 50,000 - 500,000 .15 124.44 41.48 Excess Excess .11 724.44 241.40 LITTLE CRAY Is HOUSTON , CIURTIFIED PUBLIC ACCOVINTANTIC , RABWOPTC MAINt