Cape May to Raise Water/Sewer Fees

CAPE MAY — Cape May Council introduced an ordinance Jan. 20 to raise water and sewer rates to compensate for 18 million gallons less water use last year.
Bulk users such as Cape May Point, West Cape May and the U.S. Coast Guard base consumed 11 million gallons less in 2008 than 2007. Consumption for all users in 2008 was less than 2006 levels, said City Manager Bruce MacLeod.
The city’s water/sewer utility is dependent on consumption from customers to balance its budget. In 2008, the city collected $333,000 less in water/sewer revenue attributed to fewer tourists and year round residents and shorter stays from second home owners. Household and business water conservation also contributed to less water consumption.
The reduced revenue resulted in $200,000 less in the utility’s surplus account.
The proposed rate increase would double the water facilities charge, which is a flat fee to cover the cost of wells, treatment and infrastructure. The annual fee is determined by the size of a customer’s water meter.
Most Cape May water customers have three-quarter inch meters for which the water facilities fee will double from $44 annually to $88. For those who have one-inch meters, the fee will double from $110 to $220.
The sewer facility charge will double from $60 to $120 for three-quarter inch meter users. Those with one-inch meters will see the facility rate double from $150 to $300.
The regular sewer rate will increase from $3.50 to $3.90 times the number of thousands of gallons consumed through the year. Peak demand sewer charge for the months April to October will increase from $8.25 to $9.85 times the number of thousands of gallons consumed.
Water usage rates will not increase.
The city’s proposed water/sewer budget is $6.4 million, which includes $300,000 revenue from a bond sale, a $100,000 increase in fees to the county Municipal Utilities Authority and $92,000 in additional debt service.
In addition, the budget shows a $31,399 increase over 2008. Including debt service and MUA fees, the budget increases a total of $223,529 or 3.6 percent over 2008.
Due to a $300,000 reduction in revenue, the city needs to raise $555,000 just to balance the water/sewer budget according to MacLeod.
Water rates have remained stable since 1999 while sewer rates were increased in 2002 and 2007, he said.
The proposed rate increases may yield $750,000 based on 2008 consumption levels with no further downturns creating “$200,000 to the good,” said MacLeod.
He said the sewer budget would be short about $5,800 but he expected it would “break even.”
A total of 82 percent of the city’s water or 191 million gallons is consumed from April through October, said MacLeod.
Mayor Edward J. Mahaney Jr. said the water/sewer budget is consumption driven, almost 90 percent. A public hearing on the ordinance will be held Feb. 17 at 7 p.m.