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Member Update (MU03-02)

Member Pipeline - Member Services & Information - Update (MU03-02)

To: Members & Affiliates
From: National Office
Date: February 27, 2003
Subject: 2002 AMSA INDEX – SUPPLEMENTAL INFORMATION
Reference: MU 03-02
Attachments: - Figure 1: AMSA Index vs. Inflation
                   AMSA Index Chart
- Figure 2: Ranked Distribution of 2002 Service Charges
- Figure 3: Distribution of 2002Regional Service Charges
- Figure 4: Regional Service Charges Compared to National Average

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The information contained in this Member Update is a supplement to the annual AMSA Index survey, which was originally published in the December/January 2003 issue of AMSA’s Clean Water News newsletter and is attached to this Update in the form of Figure 1 – AMSA Index vs. Inflation.

Since 1986, the annual AMSA Index has tracked service charge increases as measured against the rate of inflation. AMSA’s membership plays an important role in the AMSA Index by providing the data necessary to quantify service charge increases and identify trends. 216 public agency members participated in the 2002 AMSA Index Survey, ensuring that the 2002 Index is representative of AMSA’s broad membership.

2002 Index Shows Rate Increases Surpass Inflation
As you will note in Figure 1 – The AMSA Index vs. Inflation, the 2002 AMSA Index shows that charges for residential sewer service increased 3.6 percent nationwide in 2002 compared to 2.2 percent the previous year. The 2002 rate increase is 2 percent higher than the Consumer Price Index (CPI) marking the first rate increase greater than the CPI since 1998, and the first time since 1994 that the increase has been this significant. This data may indicate that increased costs for repair and replacement of aging infrastructure, security needs and construction to address wet weather discharges are outpacing utilities’ ability to economize operations.

The 2002 Index also indicates that average annual increases for the past nine years have remained below 4 percent — a sharp contrast to the years 1986 -1994 when annual rate increases ranged from 4.7 to 9.2 percent, well above the annual inflation rate and triple the inflation rate in 1986 and 1992. These substantial rate increases were required in large part to respond effectively to a sharp decline in federal funding of local capital projects, and increased operation and maintenance costs driven by the need to meet higher levels of treatment and to comply with new federal mandates.

Figure 2 – Ranked Distribution of 2002 Service Charges provides information on the range of residential service charges from the 216 AMSA respondents to the survey. Annual charges ranged from $49 per year to $548 year. The median value was $228, and the average was $244.

Security Needs/Aging Infrastructure Anticipated to Impact Rates
The 2002 Index suggests strongly that continued rate stabilization may be threatened as utilities are faced with mounting costs associated with security needs and the repair and replacement of aging infrastructure. Wet weather discharges from combined and sanitary sewer overflows, stormwater and nonpoint sources could also trigger higher rate increases. The infrastructure funding debate in Washington, D.C., continues with regard to the impact of significantly increased rates on local communities — and the responsibility of the federal government to share in the cost of providing clean and safe water to all Americans. AMSA is working diligently to heighten awareness of the critical financial needs of publicly owned treatment works through the continuing efforts of AMSA’s Wastewater Infrastructure Funding Task Force and the Water Infrastructure Network.

Regional vs. National Service Charge Information
Once again, AMSA is pleased to provide members with detailed regional information related to service charges. Figure 3 shows the distribution of 2002 service charges within each U.S. Environmental Protection Agency (EPA) region. The national average value of $244 is shown on each chart as an overall reference. Figure 4 shows how the service charges within each EPA region have compared to the national average each year beginning in 1986. The 100% line in these charts reflects the national average service charge for each year. This figure shows that service charges in EPA regions 3, 4, and 10 have been consistently above the national average while service charges in EPA regions 7, 8, and 9 have been consistently below the national average. Overall, service charges across the nation appear to have varied less from region to region recently than when the AMSA Index was first reported.

 

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