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Another reverse Robin Hood in Rehoboth with rates?

July 12, 2019

If the Rehoboth commissioners vote to discard the town’s long-standing peak/non-peak rate structure for water and sewer, and replace it with a proposed flat rate throughout the year, they will shift approximately $220,000 in expenses from the more costly seasonal users to the less costly off-season, or year-round, users.

In the first place, seasonal users cost considerably more to service because they require much more infrastructure, in the form of more wells, pumps, water towers, oxidation ditches, etc., to meet their short-term concentrated demand, than steady year-round users, who need less infrastructure. For 20 years, in recognition of this cost differential, Rehoboth has charged a higher peak rate during the six months of the high season, then a lower non-peak rate in the remaining off-season. This was the approach recommended by its expert rate consultant in 1999 as the most equitable way to bill.

The recent proposed flat rate would do away with this approach and institute only one rate that would be charged all year. For sewer services the proposed flat rate is $14.70/1000gal, which is 8.13 percent less than the respective peak rate of $16/1000gal, effectively giving seasonal users an 8.13 percent discount, compared to Rehoboth’s current billing practice. This would result in a shortfall of approximately $161,000 that would need to be made up by off-season users.

For water services the proposed flat rate is $6.30/1000gal, which is 8.3 percent less than the respective high season peak rate of $6.87/1000gal, resulting in an additional $59,000 shortfall in revenue during the high season. This too would have to be made up in the off-season.

Of course, there are far fewer businesses operating in the off-season and only 1,000 or so year-round households in Rehoboth to absorb the total $220,000 cost shift. Their off-season rates would go up roughly 35 percent, compared to the respective non-peak rates.

Please attend the Saturday, Jan. 13 Town Hall Meeting at 10 a.m., in City Hall, or write letters to the commissioners, to weigh in whether you think it’s fair to give more costly users a discount and expect less costly customers to pay for it.

Donna Mabry
Rehoboth Beach

 

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