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Member Update (MU02-07)

Member Pipeline - Member Services & Information - Update (MU 02-07)

To: Members & Affiliates
From: National Office
Date: April 10, 2002
Subject: 2001 AMSA INDEX - SUPPLEMENTAL INFORMATION
Reference: MU 02-07

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The information contained in Member Update 02-07 is a supplement to the annual AMSA Index survey, which was originally published in the January 2002 issue of AMSA's Clean Water News newsletter (in the form of Figure 1 — AMSA Index vs. Inflation).

Since 1986, AMSA has published the AMSA Index annually to track 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, and 220 public agency members participated in the 2001 AMSA Index Survey—ensuring that the 2001 Index is representative of AMSA's broad membership.

2001 Index Reflects Stabilized Rates
As you will note on Figure 1 — The AMSA index vs. Inflation, the 2001 AMSA Index shows that charges for residential sewer service increased only 2.2 percent nationwide in 2001 compared to 3.1 percent the previous year. The 2001 increase was 1.2 percent less than the increase in the Consumer Price Index. Average annual increases for the past seven years have remained below 4 percent and have maintained an overall consistency with the annual inflation rate.

Figure 2 — Ranked Distribution of 2001 Service Charges provides information on the range of residential service charges from the 219 AMSA respondents to the survey. Annual charges ranged from $49 per year to $569 per year. The median value was $228, and the average was $237. Use your 2001 data to determine how your agency compares to this broad sampling of U.S. communities.

The continued stabilization of rates in 2001 reflects the ongoing efforts of publicly owned treatment works (POTWs) to provide efficient services and to seek out the most competitive means of addressing wastewater treatment needs. This trend shows that POTWs remain committed to responding to their customers by economizing and keeping costs down. This trend is in 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 even triple the inflation rate in 1986 and 1992. These substantial rate increases were required in large part to respond effectively to a decrease 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.

Security Needs/Aging Infrastructure Anticipated to Impact Rates
Rate stabilization could be threatened in 2002 as utilities are faced with the costs associated with mounting security needs and the repair and replacement of aging infrastructure. Wet weather discharges from combined and sanitary sewer overflows, storm water and nonpoint sources could also trigger significant rate increases in the future. The infrastructure funding debate in Washington 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 will continue to work diligently to heighten awareness of critical financial needs through the continuing efforts of the Water Infrastructure Network.

Regional vs. National Service Charge Information
For the first time, AMSA is pleased to provide members with detailed regional information related to service charges. Figure 3 shows the distribution of 2001 service charges within each EPA region. The national average value of $237 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 less variation from region to region today than when the AMSA Index was first reported.

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