Sanitary Sewer Fund - 2010 Budget Message

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The Sanitary Sewer Fund is an enterprise fund which is intended to be self-supporting through user fees charged for services to residential, institutional and commercial customers. The purpose of the Sanitary Sewer Fund is to account for revenue and expenditures related to proper disposal of wastewater.

The 2010 Sanitary Sewer Revenue Budget is $7.3 million or $738,000 higher (+11%) than the 2009 Budget. The Fund’s primary revenue source is the sanitary sewer rental fee, which is set each spring following the receipt of water consumption data from Aqua America, Inc. In 2009, the rental fee was increased (from $3.00) to $3.18 (+6%) per 1,000 gallons of water used, which followed a +9% increase in 2008 that had ended the Township’s record of fourteen consecutive years without a rate increase. The 2009 sanitary sewer rental fee revenues are estimated at $6.6 million or +$570,000 (+9%) higher than the 2008 actual. The 2010 Budget anticipates a fee rate increase in the range of +10%, which is projected to generate a total of $7.2 million in revenue. This projection includes a moderate growth assumption, which fluctuates annually with water consumption. In 2009, the Township billed approximately $6.0 million of Sanitary Sewer Rental Fees to approximately 16,375 customers. This data will be analyzed in more detail prior to the recommendation of the final 2010 Sanitary Sewer Rental Fee rate in May 2010.

Summary of Sanitary Sewer Rental Fee Revenues (Projected 2010)
Sanitary Sewer
Rental Fee
Number of
Customers
Percentage of
Total Customers
2010 Revenue
(Flat Amount)
Average
Rental Fee
Over $300
4,213
26%
$4,358,000
$1,032
$200 - $300
3,999
24%
1,072,000
268
$100 - $200
5,450
33%
907,000
166
Under $100
2,713
17%
219,000
81
Total 
16,375
100%
$6,556,000
$400

The 2010 Sanitary Sewer Expenditure Budget is $7.6 million or +$482,000 (+7%) higher than the 2009 Budget and +$178,000 (+2.4%) higher than the 2009 estimate ($7.4 million). In recent years, the Township has undertaken an aggressive capital spending approach to upgrading its sanitary sewer infrastructure, improving facilities and controlling wastewater system inflow and infiltration issues. For the most part, the majority of expense components affecting the sanitary sewer fee are projected to grow moderately in 2010 as compared to 2009. The fees paid to the City of Philadelphia Water Department (PWD) for wastewater treatment services represent 33% or $2.5 million of the total 2010 Expenditure Budget. In 2009, PWD implemented a significant fee rate increase; a more moderate fee rate increase is expected for 2010. As a result, the Township’s costs for these PWD services are projected to increase by +11% in 2010 as compared to the 2009 Budget.

The salary and wage expenditures are projected to increase +8.6% in 2010, as a result of personnel allocations and wages. On an annual basis, personnel allocations are adjusted to properly budget for sanitary sewer capital projects and administration. The 2010 Budget includes increased resource allocations as compared to the 2009 Budget. In addition, the Township makes annual capital improvements to over 238 miles of sanitary sewer lines and required capital contributions to the PWD for capital improvements made to the Southwest Treatment Plant and related facilities. The total sanitary sewer capital costs (supported from Township bond issues) are estimated at approximately $1.9 million in 2009 and $2.1 million in 2010.

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