While it’s not perfect, current proposal is fair assignment of water-sewer costs

  • Monday, February 4, 2013 1:41pm
  • News

The Homer Water and Sewer Rate Task Force is fast approaching its final phases. Currently it’s reviewing its rate model for an April presentation to the city council. One issue within the rate-model that remains controversial is it’s “fairness,” as applied to all users. Although the model will assuredly be tweaked in response to recent public input,  fundamentally I believe it’s a fair assignment of costs.  

As a city water user I have closely followed the task force’s discussions. In fact, the rate model closely parallels my initial proposal from last spring, thus I feel a certain sense of authorship. 

So, here’s my analysis: Perhaps you recall that Homer’s water and sewer system is essentially an enterprise fund, meant to be self-sustaining. However, it’s also a relatively expensive system to operate, mainly because of fixed personnel costs. Consequently one gallon of water costs, figuratively speaking, as much to produce as 200 million. The system is capable of providing enough high quality water for a town twice Homer’s size. Unfortunately Homer’s population growth has slowed, so a limited number of meter customers, currently only 1,500 or so, must share the cost burden.

Initially the task force chose the principle of political neutrality in establishing a rate model.

That translated into the “fairness” theme,  as defined by the formula of “cost-causer=cost-payer.” It soon became evident, however, that the system’s complexity, with the inter-relativeness of  its numerous valves, pipe sizes, fire hydrants, pumps and tanks, etc., precluded specific assignment of costs to individual users. Even so, the cost distinction between users was essentially irrelevant because all, with certain exceptions, put essentially similar demands on the system.

The solution chosen was to have these multiplicity of factors be reflected in a fixed price, approximately 2.7 cents per gallon, of the desired commodity — water. Just as the price of a loaf of bread reflects all costs incurred in its production, so too, with water usage. Consume more, pay more; consume less, pay less.  

By using one gallon of water, you’ve implicitly also used a gallon of sewer. It’s that simple. True, it’s not a perfect system. Those consuming more water (additional loaves of bread) clearly pay more overall, but that’s their choice.

Additionally, a monthly administrative processing fee of $5 per multiplex unit and $18 per meter for everyone else will be applied to a user’s bill, as will tax. So, that’s the “basic” rate model. It will apply to approximately 99.9 percent of city users, excluding bulk providers whose customers, generally not using city sewer, distort the city water and sewer revenue balance.

Now for the “differential” add-ons: Some users such as restaurants place an additional demand on the system due to high grease and septic sludge. Others, such as Spit users, utilize an infrastructure system with apparent proportionally higher operating and maintenance costs, requiring continuing servicing, even in winter. These users will have a “differential” fee added to the basic fee.

This is where the “fairness” issue, mentioned earlier, comes especially into play. Should the limited number of Spit customers, for example, be required to pay an additional fee for their sewage’s higher disposal costs or should those costs be socialized — distributed equally — across the total customer base? 

I’m all for fairness, if it can be demonstrated that significant cost differentials between users and geographical areas are minimal.  If, however,  a distinquishable cost-factor is clearly evident, then — for the purposes of the rate model proposal — it should be assigned to the cost-causer. 

Personally, I believe that the rate model has a lot of integrity built into it. Modifying it at the task force level by socializing/politicizing it will only make the model more confusing, diluting  its effectiveness and legitimacy. Such an attempt by the task force members would constitute unbearable hubris, requiring of them the patience of Job, the administrative machinery of the IRS and the wisdom of Solomon, all in limited supply — even for Homer.

Much better to present it  in its pure form to the city council for their review and disposition. Then, in front of God, country and the public, the council can politically massage it as deemed necessary. In so doing they will leave their fingerprints for all  and sundry to see, bearing responsibility for the ensuing result. 

Larry Slone is a semi-retired 20 year Homer resident and a Homer Advisory Planning Commissioner who is otherwise interested in and observes city government activities.

More in News

A diagram presented by Teresa Jacobson Gregory illustrates the proposed extension of the Beachcomber LLC gravel pit and the impact it may have on the surrounding state recreation area. The red markers indicate the current gravel mining area, and the orange represents the area the extension may allow for mining if approved. (Image courtesy of Teresa Jacobson Gregory)
KPB Assembly to consider gravel-pit ordinance revisions

Proposed gravel pit ordinance follows Superior Court ruling that planning commission can deny permits.

The Kenai Peninsula Borough School District Board of Education meets on Monday, Dec. 6, 2021 in Soldotna, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
School board works to highlight students’ voices

Within the first hour of the meeting students would have up to five minutes each to address the board about any issue

Furniture awaits use in a bedroom at a cold weather shelter set to open next month on Monday, Nov. 22, 2021 in Nikiski, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
Half of beds at Nikiski shelter are occupied

The shelter opened at the end of December 2021

A group of community members gather together on Thursday, Jan. 6 at WKFL Park to protest the insurrection at the U.S. Capitol on the one-year anniversary of the attack. (Photo by Sarah Knapp/Homer News)
South Peninsula residents turn out to ‘defend democracy’

Members of the Homer community and the Unitarian Universalists of Homer gathered… Continue reading

This image available under the Creative Commons license shows the outline of the state of Alaska filled with the pattern of the state flag. The state on Thursday reported a modest population growth between April 2020 and July 2021. It's the first time since 2016 the state has reported a population increase. (
State reports small population growth

Net migration still negative, but not as negative.

COVID-19. (Image courtesy CDC)
Health officials: Some monoclonal treatments widely ineffective against omicron

The new guidance comes from the Centers for Disease Control and Prevention

State Sen. Peter Micciche fields questions from constituents during a joint chamber luncheon on Wednesday, Jan. 5, 2022 at the Kenai Chamber of Commerce and Visitor Center in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)
State Senate president lays out vision for upcoming session

Micciche seeks path forward on budget, looks to pass legislation on fishing permits, alcohol regulations

Snow covers the sign on Thursday, Dec. 9, 2021, at the South Peninsula Hospital Bartlett Street COVID-19 testing and vaccination clinic in Homer, Alaska. (Photo by Michael Armstrong/Homer News)
Local COVID-19 alert rate quadruples

State alert level per 100,000 people now is above 1,100.

Most Read