The Issue:
Water Rates Increase
Background Information
& Outcome
The
Legislation: Ordinance No. 30-02 amending Section 1.A of Ordinance No.
5-2000 in order to provide for an increase in water rates and
provide for the billing and collection of water rentals.
This legislation was discussed in several
North Canton City Council meetings (January 22, 2002,
February 4, 2002 and
February 19, 2002) before being referred to council by the
Water, Sewer & Rubbish Committee for legislation. The
legislation continued to receive vigorous debate throughout the
three readings before council.
The Outcome:
The legislation was read at three open council
meetings (February 25, 2002;
March 11, 2002; and,
March 25, 2002).
The legislation required at least four votes for passage and
received the needed votes for all three readings. The third and
final reading resulted in the following votes:
Yes: Osborne, Snyder Kiesling and McLaughlin.
Abstained: 0
No: Foltz and Magel
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My Position and Rationale
My Position: The City of North Canton needed the
water rate increase.
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The City of North Canton had increased water rates only once
in the previous 18 years, and although this might have been
good for water users in the short run, it was not a good course
of action in the long run. |
An analysis of North Canton water rates charted since 1981
(Place link to Excel Chart – Water Rates vs. Inflation Chart),
shows that North Canton water rates have not kept pace with
inflation and have fallen far short for many years.
The city was able to maintain water rates at the same level
for a number of years by not spending money on needed
improvements for the city’s water treatment plant (WTP) and
later by running water lines outside the city limits. In this
way, the city sold water to customers outside the city at rates
more than double what residents inside the city were paying.
This made up for some lost revenue but did not allow for any
buildup of reserves for future WTP improvements or major
maintenance.
But with the increasing costs and competition from other
water providers, the city could not continue raising water rates
to outside customers. By 2002, water rates to inside residential
users were falling behind the actual costs of water production
and distribution costs. And the city’s WTP was beginning to show
its age.
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Because the city had deferred improvements for many
years, the city’s water treatment plant now
needed a six-million dollar upgrade. |
In addition, the expansion
of water sales to users outside now required that the City of
North Canton expand the capacity of the WTP to handle all of its
new customers at peak usage times.
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Research & Press Coverage
Research Reports
I believe the extensive research I conducted on the water
rates issue
contributed to the passage of this legislation.
Listed below are five reports I contributed over the many
weeks that this issue was discussed in City Council:
This report highlights the need for an adequate
revenue stream from water rates so that North Canton would qualify
for revenue bonds in the bond market.
This report addresses how needlessly complicated
North Canton’s water rate structure was compared to other water
providers in the area.
This study of water rates at various
usage levels among local water providers involved extensive calculations using each provider’s rates and
rate schedules at comparable usage levels.
The tables of water costs and the line charts proved
invaluable in showing the need for a $0.75 increase in Inside
Water Rates and a lesser increase in Outside Water Rates.
In this report, I calculated the proposed increase in water
rates. The resulting tables and line charts clearly
showed that the proposed $0.50 increase in Inside Rates was
financially inadequate. In addition, the $1.25 increase in
Outside rates was too high for outside users to be competitive
and could result in a loss of water customers to other water
providers.
I wrote the memo above in response to Councilman Doug Foltz's
proposal to cash in city investments to finance water plant
improvements.
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Documentation
Press Coverage of
Water-Rate Increase Issue:
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Documentation
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