Utility Rate Structure
The adoption of the consumption-based rate structure for North Miami’s water and sewer utility in April 2012 replaced the previous Consumer Price Index (CPI)-based rate structure. Under the tiered rate structure, residential utility customers are charged for usage in incremental units every three months. The less water you use, the lower your quarterly bill will be.
Necessity of Utility Rate Study
Water and Wastewater utilities across the nation are facing serious challenges posed by a number of factors: an aging infrastructure and the increasing cost to maintain it; an increased population to provide potable water to; and strict requirements imposed by regulatory agencies to conserve water. In order for the City of North Miami Water Utility to comply with the Consumptive Use Permit issued by South Florida Water Management District and the Environmental Protection Agency (EPA’s) sewer system infrastructure handbook requirements, a utility rate study was done to evaluate the utility’s overall cost to operate and appropriate charges for utility customers were recommended.
The Consumptive Use Permit (13-00059-W) issued in August 2010, requires the North Miami Water Utility to implement a tired water conservation rate structure as one of the conditions of issuance. If the City of North Miami did not adopt such a rate structure, the water utility could ultimately be shut down.
Background on the Rate Study
In 2011, the City of North Miami hired a consultant, Black and Veatch, to conduct an extensive rate study for the City’s water and sewer utility to meet operational demands through September 2016. The study was used to develop rates that recover operating and capital improvement requirements, promote the efficient use of water resources, and address issues of equitability and affordability for customers served by the City. Water utility customers that do not live within North Miami City limits will continue to pay a 25% surcharge. Prior to this study, the last comprehensive rate study conducted by the city of North Miami was done over 20 years ago.
Last Modification to the Rate Structure
The last major modification to the rate structure was done in 2008 with the addition to Capital Improvement fees for Water and Sewer. The projects that were covered under these fees are now built into the current rate structure.
The rate structure recommended by the Black and Veatch study (PDF) was adopted by resolution at the Council meeting on April 10, 2012. Florida Statute 367.081 requires that the City’s ordinance referring to the utility rates (Chapter 19 - Utilities) be amended, which requires two public hearings, held on April 10th and April 24, 2012.