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The Altoona Water Authority Thursday raised its blended water-sewer rate for average residential customers by 6.91% for 2024.
The increase will hike monthly payments for users of 4,000 gallons of water a month by $7 to $119.
The increase conforms with recommendations in a 2022 rate study whose updated version calls for those average customers' combined bills to rise incrementally to $167 a month by 2032.
The need for the increases is largely driven by a capital plan calling for projects expected to cost a collective $118 million.
The plan calls for the authority to transition from charges largely based on the amounts of water used by customers to a 70% emphasis on fixed costs, to counter the effects of water conservation on revenues.
In years past, rate increases routinely failed to generate the expected revenues because customers would reduce their usage to mitigate the effect of the increases, creating budget problems, said authority Controller Gina DeRubeis.
The 10-year rate study plan also calls for using cash reserves to spread the necessary increases over time to avoid inflicting "rate shock" on customers, authority officials said.
The authority accumulated the bulk of those cash reserves between 2018 and 2022 by processing landfill leachate, DeRubeis said.
The authority has reduced its leachate intake to avoid conflict with regulatory limits in sewer processing, even as it boots up its recently completed anaerobic digester at the Westerly Sewer Treatment Plant, where it will process high-strength waste, according to Brad Kelly, sewer operations director.
The authority will need to balance the amount of leachate with the amount of high strength waste that it processes, Kelly said.
Last year at this time, the authority increased rates 5.5%, raising the average user's bill by $5.
There were no increases for 2020, 2021 and 2022, partly in response to COVID, officials said.
The average annual increase for average users over the last five years is 2.49%.
Customers whose water consumption places them in higher volume categories will pay lower-percentage increases than the average customers next year.
Those increases will range between 4.5 and 5.6%.
A user of 300,000 gallons a month will pay $300, or 5.6% more next year, for a total of $6,609 a month.
The increases are larger for sewer than for water.
Next year for sewer, average users will pay an additional $7, or 13.76% more than in 2023.
Next year for water, average users will pay 65 cents more, an increase of just over 1%.
The authority's water charges are about average or perhaps a little higher than the water charges for peer systems in the region that are publicly operated, but lower than for privatized systems, according to Ben Kapenstein, senior managing consultant for PFM Financial Advisors in Harrisburg, which drew up the 10-year plan.
The authority's sewer charges are average or a little lower than for peer systems that are publicly operated, but much lower than for privatized systems, according to Kapenstein.
If the city had privatized the water and systems as proposed about 20 years ago, before backing off due to opposition from authority employees and the community, customers would be paying much more for water and sewer, according to officials.
The authority built seven water treatment plants in the early 1990s, ensuring a costly maintenance and capital improvement regimen, but building that many plants was necessary because this headwaters region needs to rely on small streams that originate in the mountains, said Mark Glenn of Gwin Dobson & Foreman, the authority's consulting engineer.
It's different for cities located next to major rivers like Philadelphia and Pittsburgh, he said.
Mirror Staff Writer William Kibler is at 814-949-7038.