Linden utility rate adjustments

In 2023, the City of Linden partnered with Kopke & Associates Incorporated to generate a utility rate study for our water and sewer systems. A utility rate study is a best practice which reviews staffing, debt, operation/maintenance, capital improvements and equipment needs of utility systems. To review the complete City of Linden Water and Sewer Rate Study 2023, please go to www. lindentx.gov or visit City Hall.

Performed regularly, water utility rate studies provide transparency into what your utility can expect in the years ahead. They ensure you have the financial resources needed to meet your budget, maintain your infrastructure, grow your distribution system, explore new technologies, and implement your capital improvement plan (CIP). The 2023 utility rate study is for a five-year window.

The City had multiple meetings and public hearings for the generation of the utility rate structure which was approved unanimously. The following is a summary of the rate changes which will be in effect for the March 2024 billing cycle; 1. Condensed classifications into four classifications: Residential, Multi-family Residential, Commercial, and Institutional. 2. All classifications will continue to include the first 1,000 gallons of service for both water and sewer.

3. All classifications will be charged the same per thousand gallons for all service over 1,0000 gallons.

4. Multi-family Residential is a new classification for apartments and mobile home parks where several families are served by one meter. The minimum charge for multi-family will be a multiple of the residential minimum with the service included also a multiple of the number of units.

5. Commercial and Institutional customers will be charged 125% of the residential minimum and charged for all usage over the minimum at the residential rate. This was performed to keep residential rates lower.

6. Meter Service Charge: For customers with larger meters (over 5/8”), the minimum charge shall be calculated with American Water Works guidelines assigning a higher meter charge based on size of meter.

7. Water Rates: Increased water rates (minimum and usage charges) by 12.5% and be reviewed annually with adjustments related to annual increases in the consumer price index (CPI).

8. Sewer Rates: Increase sewer rates (minimum and usage charges) by 5% and be reviewed annually with adjustments related to annual increases in the consumer price index (CPI).

9. Sewer charges are currently based on the average water usage in low usage months of December, January and February. This was changed to charges based upon monthly water consumption.

10. Churches shall be charged water and sewer like all other non-profits which are under the Institutional classification.

The mayor, council and administration shared concerns about citizens and utility customers being able to absorb rate adjustments. The following is from the study discussing affordability of utility rates: Public financing agencies utilize an affordability index to measure the ability of customers to pay for water service. The index is based on the percentage of Median Household Income (MHI) needed to pay the monthly water charge of a typical residential customer using 4,000 gallons. Residential water rates within 1.5% to 2.0% of MHI are considered affordable. Current water rates are 0.97% of MHI reported for the City of Linden.

Recommended rates would increase to 1.17% of MHI, within the affordability guidelines. Residential sewer rates would increase from 0.89% of MHI to 0.98% of MHI. Also, well within the affordability guidelines.

The following table describes current and recommended affordability rates for water and sewer customers: