One of the primary functions of the District is ensuring the availability of sufficient infrastructure to accommodate the planned development within the two-city service area. To meet that goal, the District has an extensive planning process that includes long-term projections of community needs.
Every few years, the District updates its Master Plan document to align its growth projections with the General Plans of the two cities it serves. The required capital projects, and estimated costs, are then laid out in the District’s Capital Improvement Plan (CIP), which is included in the annual budget document.
The costs for capital projects identified in the CIP are funded by capacity charges collected on all new development. The District bases its capacity charges on the Master Plan’s growth and cost estimates to make certain that it collects enough revenue to pay for the construction of the required facilities. To the extent possible, the District attempts to fund capital projects on a pay-as-you-go basis. To fund new capital projects, the District periodically builds up and draws down capital reserves. Community growth pays for itself so that, upon future build-out, major debt service burdens will not be shifted to ratepayers.
The operation and maintenance (O&M) of the plant and sewers is paid from the monthly sewer service fees collected from each user. For many years, District customers have benefited from rates that are among the lowest in the region. Residential users pay a flat rate per month, while commercial and industrial users pay rates based on flow and loadings that they contribute to the sewage system. Those fees cover all O&M, regulatory and administrative expenses. The District does not receive any revenues from property or other taxes.
Ongoing major rehabilitation and maintenance of the plant and sewers are also funded from operational revenues. Ensuring the availability of sufficient funds for major maintenance, and eventual replacement, of the infrastructure is an important goal of the District. Consequently, the District annually contributes to a Major Maintenance Reserve, from which major rehabilitation and maintenance expenses are funded. Annual expenditures typically range from $3 million to $6 million.