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Questions remain about Rehoboth utility rates

July 12, 2019

Several weeks ago, the Utility Rate Working Group, which had been established last January to study alternatives to the current system for water and sewer rates in Rehoboth Beach, presented their recommendations. A Town Hall was then scheduled and takes place this Saturday, July 13. Thank you to the mayor and commissioners for responding to the request of homeowners for a formal public forum.
Rehoboth’s current rate structure follows a 1999 study that concluded the cost of providing peak capacity should be recovered from seasonal users. The URWG has acknowledged that there’s no singular best way to set rates, and they worked diligently over many months studying alternatives. Their stated mission included: “Do not protect any particular user group.” They chose to create one rate to be charged to customers year-round. 

So, what has changed to make our current rate structure undesirable? We’re still very much a community of high seasonal use. The purpose of our current peak/non-peak rate structure was fair billing across all user groups. To do otherwise is to shift those costs from high users to low users, especially if peak and non-peak are calibrated into the flat rate, instead of being charged during the season of highest use.

So, it seems to me that the mission failed because the one-rate structure protects the largest seasonal water users.

Property owners use less in winter; businesses typically have lower revenues in the winter. Much of our local economy is based on seasonal fluctuations. The current peak/non-peak rates also promote conservation. 

The URWG was not charged with developing comparative peak and non-peak rates, so we can’t know the exact dollar differences between the two rate structures. But, along with an increase in our service charge (now called a ready-to-serve fee), total costs will rise for many property owners. 

Going forward, as we look at all types of infrastructure, we need to analyze the linkage between users and payers, and assure that the distribution of costs and services is fair to all stakeholders.  The new water and wastewater rates seem to be moving in the wrong direction.

Why create a precedent for disadvantaging the year-round residents and small businesses by shifting costs from the largest users to the smallest? Our future city will have an even more lively commercial sector, including numerous new hotels. Let’s stick with a peak/non-peak rate structure for water and wastewater.

Susan M. Gay
candidate for Rehoboth Beach commissioner

 

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