MSD operates, maintains, and upgrades the sewer infrastructure in order to meet the expectations of stakeholders, ratepayers, and environmental regulators, as well as to protect water quality and public health. It costs millions of dollars each year to accomplish these goals. Financial stability is, therefore, critical to our sustainability performance.
As with any household or business, we must manage our expenses with respect to income and accept some levels of debt to accomplish our goals. We must also understand and mitigate the various risks inherent to the work that we do.
This section presents MSD’s 2009 performance with respect to each of our key performance indicators for financial sustainability and risk management.
Sewer Rates
Every year, MSD evaluates spending needs to maintain levels of service and adjusts sewer rates to cover costs. The recent federal Consent Decree requires MSD to make significant investments in sewer infrastructure over the next 10 years and beyond. As a result, sewer rates will rise significantly to cover the investment costs.
The figure below shows the average residential and commercial sewer rates for the past 10 years and the anticipated rate increases for the next 3 years, as described in MSD’s approved rate plan. Our goal is to make necessary improvements to the system while remaining affordable to our customers. Prudent operational process improvements and strategic capital borrowing will help keep rate increases as low as possible.
Minimum Quarterly Sewer Bill, by Meter Size
Notes: The minimum quarterly bill is a charge that includes an alowance for the first 900 cubic feet of water used, designated by meter diameter. Click image for larger view.
Due to the initial ramp-up projects for the Project Groundwork capital program, sewer rates rose 12 percent in both 2008 and 2009, and 11 percent in 2010. This means that the average residential customer is paying about $5.07 a month more in 2010, compared to 2009. The figure above shows the trend in minimum quarterly bills for three different meter sizes.
