"Show me the Money", not just a quote from a pro Athlete in the Movie Jerry McGuire but applies equally to rate and Village Taxpayers.
Breakdown of Millions of dollars in water infrastructure improvements, who pays, how much and what is gained:
The following are figures provided by B& L engineers and the Village of Ilion Annual water quality Report for 2018
Future User Costs • Annual O&M increase ~$200-300/year • Annual Debt Payment increase ~$266/year.
The annual debt payment per Ilion water customer user is pretty straight forward an increase of $266 per user. The Annual O&M increase of $200-300 appears to be more variable. The question is what the interim operations/ management look like will and include in regard to product and services, and what will the ultimate costs be once and if MVWA is the sole source of drinking water and operations. A total of $566 increase.
In 2018, the average charge per residential household was about $409.84 for the year. This figure is derived from an average family size of three people using 14,000 gallons of water per billing quarter. $975.00 annually total costs projected would be over a 110% increase!
With grants this figure will be reduced, realistically still looking at double the current rates. How are the rates going to be implemented? immediately over 2years 55% per year or 4 years 25% plus each year?
What exactly will customers be getting for this dramatic increase? Water they can finally use and drink? Plumbing that will last more than 2 to 3 years, savings in bottled water expenses, ability to fill pools, and must importantly substantial reduced health risks? Current O&M rates must decrease, we are not seeing this. We continue to see increases despite 6 employee retirements. No attrition, business as usual. Aerators, chemicals, overtime, pay and benefit increases.
Continues throwing good money after bad in keeping the wells and reservoirs as a water source, and non-commitment to total disbanding of ALL village water operations and management and handing it over to MVWA. In theory no Village operations, no annual operational costs, or a savings of $200-300 annually per user a 50% reduction in the current doubling of rates, and a more realistic option for people living paycheck to paycheck to absorb. We must see concrete and tangible reductions now. Commitment to shut down the wells and reservoirs as a source, no need for chemical additions in the clear well, no need for Village water department employees. All of this can and should be provided by a contract with MVWA.
1. The debt per Ilion user for MVWA Transmission Main is $106 per year.
2. The debt per Ilion user for the distribution system fix say $160 per year.
3. Cost of water per user for MVWA water say $300 per year. (A minimum user (less than 900 CF per quarter, which equals 6,732 gals) would actually pay $66.99 per quarter, or $267.96 per year.)
4. Remaining cost per Ilion user for maintain their own distribution system say $200 per year (assume half the current budget because the WTP will be done, the $408 you mentioned below goes down to ~$200 or so)
Total is $106 + $160 + $300 + $200 = $766
This could be reduced by the $200 is MVWA takes over O&M.
An eventual Ilion user water cost would be $106 + $160 + $300 = $566 per year compared to the $408 per year now even after a $30,000,000 investment.
Benefits:
· New cleaner water source
· Improved distribution system
· Steadier system hydraulics
· No iron or manganese issues
· MVWA professional operations
· MVWA professional treatment and engineering oversight
· Better transparency
· 130,000 other customers to help shoulder any future improvements.
Residents, myself included, are asking questions regarding the current and estimated annual operational costs associated with various capital improvements proposals. Specifically do these costs take into effect interim operations that may occur between going from operating the wells and filters, to total MVWA operations and source?
Likewise, do these costs consider possible selling of assets, and total dissolution of Village involvement in providing drinking water product and services. Many are asking why transitional changes, such as attrition of certain positions, operations and costs are not occurring, how long will dual spending on current operations and future simultaneously continue and will there ultimately be more operational savings once the MVWA option is fully implemented.
The projected costs per user for Ilion alone is expected to be over a 110 % increase. Anticipating grants and loans will lower this, but even at a realistic 60 -75% increase, changes in budgets, spending, operations, and rates, need to occur sooner rather than later.
. The truth is that the cost will change if a community (municipality backs out, but that is also why not including grants in the estimates for the Transmission main user costs were not used in monetary amounts and calculations.
Roughly speaking every $3,000,000 grant toward this project is a reduction of $13 per user. That mean that the recent MRF grant reduces the $106 per user to $93 per user. The next $3M grant would reduce it further to $80 per user.
As for the total dissolution of the water system and relenting O&M to MVWA this is a larger Village general budget issue. The Village is reaching its Constitutional property tax limit and must make some cuts (General fund) unrelated to the water system before it can do away with all O&M. Currently the Utilities both water and electric heavily subsidize the Village General fund. The water budget well over $150,000 annually and the electric well over $400,000 annually.
This will be topic of future opine and future blog analysis.
We must also keep in mind that some grant programs won’t contribute grant dollars until the user costs reach the statewide average of $900 per household. Many poorer communities that Ilion are already at the $800 to $1000 annual water costs.
This is a worthwhile investment in health, safety, and quality of life. Not to mention, the prospects of economic development a clean and abundant water supply can bring.
David Murray
13 Grove Street Ilion NY
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