Infrastructure is expensive. That’s not an excuse. It’s a reality, one we manage every single day.
We owe it to customers to be responsible, resourceful, and respectful in our decisions to ensure we are spending smart. That’s an obligation and it should be your expectation.
As that critical need to maintain and improve our wastewater and stormwater systems remains a priority, we’ve proposed an annual rate increase of 4.7 percent for the years 2022–2026, a schedule we presented to our Board of Trustees at their April 7 meeting.
The rate increase will help to fund, in part, the uninterrupted work of our plant operations, which includes cleaning sewage from 330,000 homes and businesses, as well as funding stormwater and sewer projects designed to protect public health and improve our region’s waterways.
“For nearly 50 years, the Sewer District has invested $5 billion in sewer and stormwater projects. Our early work included restoring the Cuyahoga River through sewer investments, which significantly reduced the amount of pollution making its way to the river,” said Kyle Dreyfuss-Wells, Sewer District Chief Executive Officer.
“The work, however, does not stop. Our community’s 330 miles of regional sewer pipes, 3 wastewater treatment plants, and 476 miles of regional streams requires continual maintenance and care to ensure we protect public health and the freshwater quality on which our region relies...”
“We must also build and maintain new infrastructure to address the region’s legacy of combined sewer overflows and significant flooding and erosion problems that threaten public safety.”
Three virtual public meetings are scheduled — April 23 and 24 and May 3 — and all are welcome to attend.
At a glance: What the rate change looks like
The chart here shows how this year’s rates compare to the annual changes proposed to our Trustees earlier this month as our rate study continues. Three notable changes include:
- One unified rate for City of Cleveland and suburban customers. We will no longer differentiate rates between Cleveland and suburban customers. All customers will pay the same usage rate per MCF (1,000 cubic feet of water).
- 4.7% increase is notably lower than anticipated in 2016. As we conducted our 2016 rate study, we anticipated a potential annual increase of more than 9% a year starting in 2022. Thanks to a number of efficiency efforts, we’ve cut the rate of increase almost in half.
- Expanding eligibility for affordability programs. We plan to open our Affordability Program eligibility to renters (who have water or sewer bills in their name), as well as increasing the income threshold to 250% of the Federal Poverty Limit (it is 200% today).
Where your sewer bills go: The work we do
As part of the 2022–2026 rate cycle, monies will be used to fund, in part, operations, including increasing utility and chemical costs as well as stormwater projects, like stream rehabilitation and debris removal.
One of the largest expenses are capital expenditures, including construction related to Project Clean Lake, the Sewer District’s $3 billion, 25-year infrastructure investment program to address combined sewer overflows.
Combined sewer overflows result in a mixture of sewage and stormwater discharging into the environment during heavy rain events. Existing in nearly 800 cities, including Cleveland, Columbus, Akron and Cincinnati, combined sewers were once a state-of-the-art system to manage waste, and must now be addressed, so that the volume of pollution entering waterways can be reduced.
Since the start of Project Clean Lake in 2011, our goal is to reduce combined sewer overflows from 4.5 billion gallons to 500 million gallons annually by 2036. To date, we have eliminated about one billion gallons of combined sewer overflow and anticipates the elimination of an additional 515 million gallons by 2023.
And because of Project Clean Lake and other capital investments, the Sewer District will have reduced combined sewer overflow discharge points from 126 to 112 by the end of this year.
“Treating wastewater and managing stormwater is extremely expensive. Our rates are based on how much money is needed to ensure our critical, life-sustaining services are available to our residential, manufacturing and industrial customers today, tomorrow and in the future,” said Ken Duplay, Chief Financial Officer.
“In addition to keeping our finger on the pulse of costs, the Sewer District has been exceptionally resourceful looking for opportunities to significantly save money.”
Smart savings, sound management
In 2016, we anticipated a nine percent annual increase for the 2022 through 2026 rate cycle. But thanks to a series of sound financial decisions, the Sewer District realized several savings that benefit customers:
- Saved $18 million (net present value, or NPV) in 2017 on a bond refinance, which were designed to help finance sewer construction projects,
- Saved $37 million (NVP) i 2019 on refinance of a portion of 2010 Build America Bonds, which, too, were designed to help finance sewer construction projects,
- Saved nearly $500 million from value engineering on awarded construction projects since 2010, and
- Saved $70 million (NPV) on various operations initiatives.
“While federal sewer and stormwater infrastructure funds were prevalent in the 1970s and 1980s, they are non-existent today, so minimizing costs and expanding savings is critical,” said Dreyfuss-Wells.
“We are grateful to the Biden Administration for including water systems in the recent American Jobs Plan. In the meantime, the Sewer District will continue to its robust advocacy work. Most recently, we joined forces with the National Association of Clean Water Agencies’ ‘Affordable Water, Resilient Communities’ campaign to promote the need for a federal-state-local partnership to keep rates affordable and water systems and resources protected for future generations.”
Our other advocacy work includes working with state and local partners to ensure customer assistance is distributed quickly and effectively. The agency is also focusing on Congress’ Fiscal Year 2022 Appropriations bills — specifically Community Project Funding submissions, or “earmarks.”
Meeting customers’ needs: Expanding affordability programs
We made it a priority in this rate study to increase the number of customers eligible for the Sewer District’s cost saving programs, specifically, the Affordability Program.
As a result, proposed changes to eligibility requirements include adding renters whose sewer and water bills are in their name, as well as increasing the income threshold for the Affordability Program from 200 percent of poverty to 250 percent of poverty.
Both changes would open the programs’ doors to an additional 40,000 customers who would not have been eligible otherwise.
“We’ve offered cost saving programs for decades, even adding a new program, the Crisis Voucher Program, in 2012, so that those facing a hardship could get some relief,” said Constance Haqq, Chief Administrative Officer for NEORSD.
“However, as a national leader on this important topic, we recognized that more needed to be done…”
“We have done more as a US Water Alliance partner on the Water Equity Task Force. We continue to participate in the affordability discussion locally through the Greater Cleveland Water Equity Task Force, developing a roadmap to identify problems and develop solutions to ensure clean, fresh water for all, regardless of income.”
A series of virtual public meetings will be held for customers so they can better understand the Sewer District’s work, including how rates are established and how those monies are spent, as well as ask questions.
Virtual meetings will be open to the public:
- Friday, April 23, at 11:30 a.m. | Register
- Saturday, April 24, at 10 a.m. | Register
- Monday, May 3, at 6 p.m. | Register
Customers can register to attend these public webinars at www.neorsd.org/behindthebill. We’ll also post the videos following each broadcast.
New wastewater rates go into effect annually.
Currently, the Sewer District charges a monthly base rate of $9.70 plus $106.50 for each “MCF” (1,000 cubic feet, or 7,480 gallons of wastewater) used.
A typical household uses 0.5 MCF and an average wastewater bill is approximately $62.95 monthly in 2021; an average stormwater fee, based on a property’s impervious surface, for residential customers is $5.15.
Here’s what a typical customer would pay for a combined sewer and stormwater bill per month over the years 2021 through 2026.
“We want to ensure our customers have the opportunity to not only understand who we are, what we do and why it’s important, but know how we wisely use their monies to protect public health and the environment,” said Haqq. “That’s why we host these meetings.”
If customers are unable to attend these meetings, they will be able to view a recording, learn about a variety of affordability programs and review a list of frequently-asked questions at neorsd.org/behindthebill. Cleveland’s TV20 will air a special edition of “Clean Water Works” throughout the month of May examining this rate increase. If customers do not have internet access, they can contact Customer Service at 216.881.8247 for assistance.
The Board of Trustees is expected to vote on the proposed rates on June 17, 2021. Rates are set in five-year increments and the current rate cycle ends on December 31, 2021.