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Questions and Answers about the Five-Year Sewer Service Charges Plan
BASIC FACTS ABOUT THE SEWER SERVICE CHARGE INCREASES
Q: What are the amounts of the sewer service charge increases?
For Residential Customers $1.75 per month on average. The District approved a sewer service charge increase of $1.75 per month (or an average of about 3.5%) for most residential customers over each of the next five years. For low- and high-water users the percentage change is the same, but the amounts will be lower and higher than the average.
For Non-Residential Customers about 29 cents per month per $100 of prior charges. The District approved an annual sewer service charge increase averaging about 3.5% per year over each of the next five years – this is identical to the residential increase. This is approximately equivalent to an increase of about $3.50 per year (or about 29 cents per month), for each $100 of your prior year’s sewer service charge (actual charges will vary depending on your water us, etc.).
Note that most customers pay their sewer service charge on the property tax bill.
Q: How many years do the increases in charges cover?
The cycle of charges covers a five-year period, ending June 2021. The rates take effect each July 1 starting in 2016 and appear on the property tax bill in the fall billing cycle. The final increase will take effect on July 1, 2020.
Q: How do the increases compare to the inflation rate?
The increase, for both residential and non-residential customers of the Novato Sanitary District is about 3.5%. This is below the generally accepted wastewater industry inflation rate of about 5%.
Q: How do NSD sewer service charges compare with nearby sanitary districts?
Among the lowest charges in the County. The District has been proactive in keeping costs down. NSD has among the lowest overall sanitary sewer service charges in Marin County and are still among the lowest even after the recent increases.
Q: When was the last increase?
The last increase was July 1, 2015.
Q: How can I obtain more details about the Increases?
The District had prepared a legally mandated Proposition 218 notice with details about the rates, and how to get more information. Here are the residential and non-residential versions that were mailed to all District property owners.
Q: Is there a report or study that discusses the Increases?
Yes. The charges were developed by an independent outside public finance firm, Bartle Wells Associates, through their 2016 Sewer Service Rate Study report. A copy of their report can be accessed here. The report also includes historical data, and revenue and expenditure projections over the next five fiscal years. More historical revenue/expenditure data and our annual financial statements can also be found in our award winning Comprehensive Annual Financial Reports (CAFRs), which can be accessed under the "Finance" tab here.
HOW WILL INCREASED REVENUES BE USED
Q: What are these increases in sewer service charges needed for?
Increases in sewer service charges are needed to continued undertaking upgrades and increased levels of maintenance to safely provide quality sanitary sewer services that protect public health and the environment.
The District has made many improvements in recent years, such as upgrading treatment facilities, pump stations, and sewers, as well as incorporating new technology. Sewer service charges fund 90% of all district operations, maintenance and replacement of aging facilities. The increases will allow the District to continue upgrades of the treatment facilities, pump stations and sewers, while keeping up with inflation.
Q: What Improvements has the District achieved with revenue from previous charge increases?
$200 million rebuild of the treatment plant and sewer pipeline collection system to ensure safe, reliable service. Over the last 15 or so years, the District has: completed a total rebuild of the sewage treatment plant using modern technology; rebuilt and upgraded all pump stations and a portion of the collection pipeline system; and expanded its recycled water supply program. Additional upgrades remain as well as operations and maintenance investments to ensure, safe, reliable service that protects both public health and the environment.
Lowered the District’s Carbon Footprint. With the updated sewage treatment plant, NSD has reduced greenhouse gases by 14%. New revenue from the proposed rate increase will help fund renewable energy efforts at the plant.
Q: Will These Increases Help Fund Actions to Continue Protecting the Environment?
The District is at its base has a mission of protecting public health and the environment. The District, therefore, has many ongoing and planned programs to ensure that its sanitary and solid waste programs protect air, water and land resources of our community as well as the residents who live here. Examples of environmental programs:
- Creating energy from heat and gases to operate the treatment plant
- Lowering carbon footprint by 14% through a number of efficiencies
- Recycling more than 150 million gallons a year of water for irrigation of large landscapes, and more water for augmentation of wetlands and pasture lands.
Q: Has the District prevented sewer spills and met regulations?
NSD is proud of its excellent safety and regulatory achievements. The treatment plant has had zero incidents of spillage and discharge into surrounding property and waterways and a near perfect regulatory record. The sewer collection system has undergone vast improvements and generally meets all requirements but there are areas that need continued improvement that will be funded by the proposed increases.
MORE INFORMATION ABOUT DISTRICT FINANCES
Q: What are indicators of the District’s financial management?
Financial managers have implemented General Accounting Standards Board principles to be transparent and accountable for costs and revenues. Over the years, auditors have commended NSD for its accounting practices.
Awards for Excellence in Financial Reporting. Novato Sanitary District has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association every year since its first 2010-11 Comprehensive Annual Financial Report. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting, and represents a significant accomplishment.
AA Bond Rating. Financial appraisers have awarded NSD an “AA” rating, which means the District gets favorable rates for loans and bonds.
Rates among lowest in the region. Even with some of the lowest rates in the region, District services are high quality, safe, protect the environment and meet regulatory requirements.
Q: How has NSD kept costs down over the years?
Novato Sanitary District has a long history of cost cutting while maintaining quality service. As a result, your rates for both sewer service and trash service are among the lowest in Marin County. A few examples are below:
- OBTAINED LOW INTEREST LOANS FOR TREATMENT PLANT REBUILD. $1 million annual savings. From interest rates about 5% below market rates of the time.
- CONTRACTED WITH PRIVATE COMPANY TO OPERATE THE TREATMENT PLANT. $1.4 million annual savings.
- OBTAINED GRANTS FOR RECYCLED WATER. $2 million annual savings
- PENSION AND BENEFIT CHANGES LOWER COSTS.
- Implemented a defined contribution retiree medical plan for new employees in 2008. This plan is similar to a 401(k) plan, and will lower the District’s long-term retiree medical costs compared to the former defined benefit retiree medical plan.
- Modified the pension plan to lower District costs by having employee contributions be completely paid by new hires after January 1, 2012 and by all employees by FY17/18.
- Changed benefits so healthcare cost increases are tied to increases in a healthcare cost index.
- Paid off CalPERS side fund, reducing District contributions to fund pension benefits.
- Changed pension plan formula for all vested employees hired after April 23, 2012 to 2% per year of service at age 60, based on a three-year salary average, compared to the former 2% per year of service at age 55, based on a one-year compensation formula. All new hires are eligible for 2% per year of service at age 62.
- OTHER COST SAVINGS
- Cooperate with other agencies to share services and employees and increase efficiency. For example, we share laboratory resources with the water District, share a safety officer with another District, and participate in a regional recycled water program with the Water District.
- Carry out strategic capital improvement planning. By being proactive, the District can lower costs and improve quality.