Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, April 19, 1991 TAG: 9104190804
SECTION: VIRGINIA PAGE: B1 EDITION: EVENING
SOURCE: JOEL TURNER MUNICIPAL WRITER
DATELINE: LENGTH: Medium
City officials are considering a financing plan that would eliminate part of the discounts now given to businesses, hospitals and industries.
Norfolk Southern, Roanoke Memorial Hospital, Roanoke Country Club, Roanoke Electric Steel, large motels, apartment complexes and others could pay double - and triple in some cases.
The monthly charge for water for a hospital or country club that uses 3.7 million gallons would increase from $1,101 to $3,324 under one financing alternative under consideration.
A business that uses 750,000 gallons a month, for example, would see its bill increase from $339 to $652.
The four-step rate scale now in use prices water more cheaply as consumption goes up. Localities traditionally have used such an approach to attract and retain businesses and industries.
Under the sliding scale, residential customers pay 43 cents for each 100 cubic feet (750 gallons). The rate gradually decreases to 16 cents per 100 cubic feet for customers who use several million gallons per month.
With the current scale, the city is selling water to larger users at less than half the cost of producing it, according to Kit Kiser, director of utilities and operations for the city.
Kiser said Thursday night that it costs the city 58 cents per 100 cubic feet to treat and distribute water to customers. "Selling it at less than half the production cost is prohibitive," he said at a meeting for large water users that attracted only three people.
About 35 businesses, industries and other large users would be affected by the proposal. Notices of the meeting were sent to all large users, and Kiser had expected 30 to 40 people to attend.
City officials have proposed to eliminate the last two steps on the sliding scale. The city would keep a two-step scale so large users would still get a discount, but it would be much less than the discount they receive now.
Even with the proposed increase, Roanoke's rates for large users would remain lower than those in Salem, Vinton and Roanoke County, Kiser said.
In recent years, many localities have eliminated sliding-rate scales and switched to the same rate for all customers, Kiser said. Some localities have started charging higher rates for heavy users to encourage water conservation, he said.
"When you have plenty of water, you can make an argument for lower rates for large users," he said. "But when you don't have the water, it is a matter of fairness and asking everyone to pay their fair share."
Under one financing plan, the water bill for an average residential customer would increase from $3.89 to $7 per month, or an average of 10 cents a day. The daily increase for a commercial customer using 75,000 gallons per month would be $1.11. An industrial customer using 3.7 millions gallons per month would face a daily increase of $70.93.
City Manager Robert Herbert will make a recommendation next month to City Council's Water Resources Committee,Kiser said.
by CNB