Lancaster city is proposing a sewer rate increase for its suburban customers, and officials say a rate increase within the city is coming, too.
The city has filed paperwork with the Public Utility Commission seeking approval for a 45% increase for residential customers outside city limits. For a typical household using 12,000 gallons per quarter, that would represent a quarterly hike of a little over $23.
The city has three usage tiers: A customer’s first 75,000 gallons per quarter are billed at one rate, gallons 75,001 through 1 million at a second rate, and additional usage above that at a third.
The city is proposing increases of 37% for tier No. 2 and 71% for tier No. 3.
Even with the proposed increase, the city says its rates would remain among the lowest in the county. Moreover, the commission may not approve the full amount.
The earliest the new rates could take effect is Sept. 17. The commission’s review is expected to push the date back, but probably not beyond the end of the year, city officials said.
The change would affect about 3,400 suburban customers, mostly in the townships of Lancaster and Manheim. A few are in East Hempfield, East Lampeter and Manor townships.
The city’s last rate change for those customers was in 2013. For a typical household, the increase was 49%.
The commission does not have jurisdiction over rates within city limits. Those are set by City Council vote, normally as part of the annual city budget process.
The commission arrives at its rate decisions by modeling the cost of providing sewer service. Once it does so, the city will use that model to determine new in-city rates, director of administrative services Patrick Hopkins said.
Though the methodology will be the same, it will yield a different set of rates, because of the different customer mix and sewer infrastructure inside the city compared with the suburbs, Hopkins said.
By way of example, if the commission approves the suburban rate increase as-is, the corresponding residential rate increase inside the city would probably be about 28%, he said.
Assuming the commission acts this year, City Council could follow up with new in-city rates effective Jan. 1, Hopkins said.
The proposed suburban increase would generate an extra $646,727 a year. The city says it has made “significant capital improvements” in the system, with more to come, and that its operating costs are increasing.
The revenue it is seeking is needed to cover those expenses and put the system on a firmer financial footing, it says.
A small portion of those expenses are due to the consent decree the city entered into with federal regulators to stem stormwater overflows into the Chesapeake Bay watershed, Hopkins said. Expenses related to that agreement — and the corresponding need for revenue — can be expected to increase significantly in the future, he said.