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Metropolitan Wastewater Management Commission Budget and Program Summary <br />OPERATING BUDGET AND RATE HISTORY ' <br />The graphs on this and the following page show afive-year Regional Operating Budget <br />comparison, and Regional Residential Sanitary Sewer costs over afifteen-year period. Because <br />the Equipment Replacement and Major Infrastructure Rehabilitation programs are managed in <br />the Eugene operating budget, these programs are incorporated into both the five-year Regional <br />Operating Budget comparison graph (below) and the Five-Year Capital Programs comparison <br />graph on page 28. <br />Between FY 97 and FY O1, the Commission was able to maintain the same rate of $8.78 for a <br />monthly regional sewer cost for the typical residential user, based on 5,800 gallons. This was <br />achieved through the implementation of a competitiveness work plan which resulted in improved <br />effectiveness and cost reduction. It should be noted that during the same timeframe, average <br />residential water usage has progressively dropped to about 5,000 gallons per month, due to the <br />effects of building code changes and conservation measures. At 5,000 gallons typical usage, the <br />average residential bill went down to about $8.13 per month. <br />For FY 01-02, MWMC adopted a rate increase of 5%. The increase was intended to provide <br />sufficient funding for several years. However,: the fiscal year saw the beginning of an economic <br />downturn, unexpected increases in power costs, billing and collection costs, and employee <br />benefit costs. At the same time, reduced usage due to aggressive conservation efforts on the part <br />of the water utilities resulted in a significant shortfall in revenue. The 5% increase in user rates <br />resulted in less than a 1% increase in revenue in FY 01-02. The FY 02-03 budget was balanced <br />without the need for a rate adjustment. At 5,000 gallons typical usage, the average residential <br />bill during this 2-year period was about $8.53 per month. <br />The Commission provided direction to staff to prepare the FY 03-04 budget assuming an <br />increase in rates of 6.5%. The combination of increased operating costs and decreased revenues <br />would typically indicate the need for a much higher increase, but the Commission chose to <br />moderate the impact by reducing the User Rate contribution to the Capital Reserve for this fiscal <br />year. The FY 03-04 budget was built to anticipate a number of future cost drivers, including <br />future capital needs, utility cost increases, lower flows from industrial dischargers, and slower <br />economic growth. <br />With the adoption of the new rate schedule for FY 03-04, the monthly regional sewer cost for the <br />typical residential customer will be $9.09, based on an average residential use of 5,000 gallons <br />per month. If there are revenues collected in excess of current year operating and capital <br />requirements, these funds will be held in the Rate Stability Reserve, to help sustain stable rates <br />for the next fiscal year. <br />Page 20 FY 03-04 BUDGET <br />