Emergency Surcharge

[Bert Kemp]

My local water company is requesting a emergency surcharge be added to our monthly water bill to pay for repairs to the water storage tank. Why would they ask us to pay for repairs. We pay a water bill each month. I know the fee's we pay cover repairs to the system pay the help and what not and I'm sure they must have some sort of insurance for when things break down. So why should they expect us to pay extra each month to cover something that should already be covered.??

[Lee Schierer]

I think that these questions could best be answered by your local water company. Some water providers are COOP services supported by the members they serve and not by any municipality. I doubt that they have insurance for major repairs to replace aging infrastructure and not caused by an unforeseeable disaster.

[Mike Henderson]

There are a couple of ways for dealing with unforeseen problems. One is to have a reserve fund that can be drawn upon when those kind of things happen. The other is to add a surcharge to pay for the problem. Looks like your water company uses option 2.

The reason many municipal facilities don't use option 1 is that people start complaining about "all the money sitting there" doing nothing.

Mike

[Brian Henderson]

The reason many municipal facilities don't use option 1 is that people start complaining about "all the money sitting there" doing nothing.

That's why you don't have money sitting there, you use it to pay for an insurance policy that, should the need arise, will fund repairs and ongoing maintenance. Of course, a lot of utility companies simply do no maintenance whatsoever on their pipelines, such that they fail catastrophically because they've never been kept up. Los Angeles is having a major problem with this right now because the pipes date from the 1940s and have not been maintained. It is estimated that bringing them up to date will cost more than a billion dollars. Whose fault is that? Certainly not the people who have been paying their bills every month.

[Stan Calow]

There is no insurance for routine repairs and replacement. Deferred maintenance and low-bidder services is how politicians show taxpayers they're doing their jobs by keeping taxes and rates low. People vote for that. If its a municipal utility, they don't charge rates to make a profit. If the costs exceed the income, the money has to come from the owners - the customers.

[Bert Kemp]

This is a small privately owned water company. Funny I think most people here on the forum are small business some maybe big business but I'll bet most all of you set some of your income aside for repairs and break downs and I'll bet the bigger business's here have Insurance to cover major expenses. I guess in the end it really doesn't matter if we want the water to flow we'll pay the extra each month.:eek:

[Bert Kemp]

Right routine stuff should be paid for by the monthly fee's. Isn't that why we get a bill each month.


There is no insurance for routine repairs and replacement. Deferred maintenance and low-bidder services is how politicians show taxpayers they're doing their jobs by keeping taxes and rates low. People vote for that. If its a municipal utility, they don't charge rates to make a profit. If the costs exceed the income, the money has to come from the owners - the customers.

[Stan Calow]

Right routine stuff should be paid for by the monthly fee's. Isn't that why we get a bill each month.
Yep, they should have planned for it, but they didn't. So now they have an unplanned expense. They either have to borrow money to pay for it and raise rates to pay for a loan, or raise rates and pay for it now. If its a city-owned utility, they can take money from somewhere else like the fire or police department. In any case, with municipal utilities, the they is us.

You watch, once past this crisis, see if they plan for funding the reserve account for replacing all the other infrastructure. Every pipe, pump, hydrant and tank eventually needs to be replaced.

I've seen it happen many times when city governments want to save money in the short term by keeping rates low, or even use utility revenue to pay for other city projects. My city is currently planning on spending a couple of billion on sewer projects that are result of poor planning and deferred maintenance.

[Bruce Wrenn]

You ask why the surcharge? The answer is simple-Because they can! That's why I don't plan on ever giving up my well, or living some where that has home owners dues.

[Wayne Lomman]

I'm with Bruce. If you live where you have services, the trade off is you give up control of aspects of your life. That's not for me. Cheers

[Dick Latshaw]

So why should they expect us to pay extra each month to cover something that should already be covered.??

Fortunately for you, you live far enough west to avoid the clutches of Duke Energy. Duke, and their paid friends on the Florida Public (Dis)Service Commission, have us paying for one nuclear plant that, when it broke, they tried to fix and botched the job, so it is unusable, and a second plant that they never plan to build. :mad:

[roger wiegand]

The ratepayers demand the lowest possible monthly bill, not accumulating a repair fund is one way to achieve that. We go through this argument every year at town meeting. People hate the idea that any money beyond the absolute minimum required for operation is being collected. Fortunately, in our town good sense usually prevails. We have to listen to the wailing and moaning from the cheapskates every year, nonetheless.

[John A langley]

We moved into our house in May 1980 the water district had a four dollar debt service charge it is now $14 The debt was paid off along time ago we also have what they call special assessment that started out as eight dollars a month for attorneys fees they have lowered that one to four dollars a month. The water district Has about 1100 paying customers they charge $6500 for a meter They have roughly $750,000 in the bank half a dozen people at the most go to the annual meeting The only thing people care about turn the tap and get water.

[Mark Blatter]

You ask why the surcharge? The answer is simple-Because they can! That's why I don't plan on ever giving up my well, or living some where that has home owners dues.


I completely agree. Yet having said that, I had a well once that went bad a year after buying the house. We drilled a new one that was 30 feet deeper but it only lasted 18 months. We had to drill another one that went down another 34 feet. We had great water every time, but still had the expense of drilling two wells. Not cheap, but I would still rather be on my own well than on city water.

[Pat Barry]

Its a large cost - capital improvement. That isn't covered by the monthly costs set aside for routine maintenance. Its similar to where i live. We pay fees to the city for street maintenance and repair - that doesn't cover the cost for new storm sewers, streets, curbs, water piping, sidewalks, etc. All that gets billed back to the homeowner on a separate charge - costed out on a per foot basis. Lucky me lives on a corner so I get charged 2X the normal price because of double the frontage.

[Bert Kemp]

Not to change the subject but I will LOL when I lived in NH , I lived on a private road, all maint was taken care of by the property owners, plowing,grading, tree trimming ect ect We even bought our own street sign ,yet the town charged us road frontage on our tax bill. You figure that one out, no matter how much we complained it was basically TOO bad for you.
Its a large cost - capital improvement. That isn't covered by the monthly costs set aside for routine maintenance. Its similar to where i live. We pay fees to the city for street maintenance and repair - that doesn't cover the cost for new storm sewers, streets, curbs, water piping, sidewalks, etc. All that gets billed back to the homeowner on a separate charge - costed out on a per foot basis. Lucky me lives on a corner so I get charged 2X the normal price because of double the frontage.

[Ole Anderson]

I live in a subdivision that is on a small series of municipal wells, probably a six hundred customers at most, run by the county on behalf of the township. Most wouldn't consider it "city water" as you need a softener. Most city water supplies have a surface water source and a treatment plant. Half of my sub is older and on wells. I could do either when I built my home 42 years ago and chose not to have my own well. Best choice ever as I only had to pay a connection fee of $500. Much higher now. Power goes out? I still have water, hot too with a gas water heater. Many neighbors have had to put in elaborate softeners to deal with the iron, not me. Many have had their wells replaced over the years, not me.

Not much to add with regard to the PO's question. Folks don't like to pay for something they might need in the future, but a responsible operator will have a reasonable sinking fund for unforseen smaller repairs, and larger forseeable issues, like painting a water tower. But then when an unforseen major item comes along, like the sinkhole in Macomb County MI when an 11 foot diameter, 75 foot deep sewer recently collapsed causing a huge sinkhole, the $100 million repair cost simply can't be absorbed within the budget, somebody has to pay and it won't be taxpayers not serviced by the sewer.

[Brian Elfert]

Not to change the subject but I will LOL when I lived in NH , I lived on a private road, all maint was taken care of by the property owners, plowing,grading, tree trimming ect ect We even bought our own street sign ,yet the town charged us road frontage on our tax bill. You figure that one out, no matter how much we complained it was basically TOO bad for you.

I assumed the road in front of my house was paved when I bought the house in 2014. I asked the city when they would be repaving it because it is in really bad shape. They informed me it is technically not a paved road and would never be repaved. I was told the road was gravel up until ten or twelves years ago and the city had millings put down. The city only repaves roads that were paved when the development was built.

Every house pays a street paving fee yet my road will never be paved. I don't expect my road to be paved, but I can't stand paying for everyone else's paved road. Yes, I have complained at city council meetings and emailed my the mayor, but it fall on deaf ears.

[Sean Troy]

Water prices are just weird. We pay 2 times as much for water in Kentucky as we did when we lived in Arizona. Go figure.

[Brian Elfert]

I don't understand why a water supply wouldn't be considered city water just because a softener is needed. Pretty much any city water in Minnesota that is pumped from the ground will need to be treated with a softener to remove iron and minerals. City water typically has less iron and minerals than a well in the yard, but still needs a softener. Some cities get water from rivers and that water doesn't usually require a softener.

Minnesota has lots of iron in the ground which gets into the water. The iron is the reason we have a number of taconite mines.

[Steve Peterson]

Right routine stuff should be paid for by the monthly fee's. Isn't that why we get a bill each month.

You are already paying for the routine stuff in your monthly bill. It sounds like they have an unusual repair bill and they need help paying for it. They can either charge you extra every month to either build up a reserve or buy insurance to cover the repairs. Either of these options would increase your bill all the time.

The other option is to charge extra only during the time when the extra money is needed to complete the repairs. I think this works out to be slightly better overall. All of your previous bills were slightly lower.

Steve