How Your Water Rates Are Determined
The Commission performs the water and sewer billing function for the Towns of Dryden, Ithaca and Lansing, and the Villages of Cayuga Heights and Lansing. Each municipal board sets rates to pay for the services received by the users.
Initial Startup Costs: In most cases, the capital costs for the infrastructure are paid for with a long term financing arrangement. Selling bonds is the local governments’ way to get funds to build water and sewer projects. The boards decide the best way to assess the payback costs to the users that benefit from the improvement. These costs are customarily included in the property tax bill.
Operating Costs: The operating costs for the benefit include ongoing expenses to maintain the service. The municipal governing board sets the rates it will need to finance the day to day operations of the benefit. Each municipality of the Commission has a different set of rates to cover the annual expenses incurred in that benefit district. Rate differences are primarily a result of variations in repair and maintenance histories. Two other components of the operating cost are related to availability and demand.
Availability: The benefit district providing you with a service has a given amount of expenses to make the service available. The minimum bill was derived to allocate the availability component of the operating costs to each customer in the benefit district.
Demand: Above and beyond the minimum bill, demand charges are based on the units of consumption. Like gas at the gas pump, customers pay for the service based on units of use.
Meter Reading: A vital component to fair and equitable rates is the meter reading. The Commission has installed meters which automatically report usage four times per day. Accurate meter readings help ensure customers pay only for the amount they use. The combined totals help the Commission and the municipal boards set rates to cover the operating costs. Histories of actual meter readings assist in the annual budget preparation process.