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1. Do I have to pay the Environmental Surcharge if I only have a storm water account?

No. Storm-water-only customers do not pay the environmental surcharge.

2. What is the base rate?

Under the base-rate system, every residential wastewater customer is charged a fixed operating fee of $23 per month, which helps to cover the cost of maintaining and operating SD1’s network of sewer pipes, pump stations and treatment plants 24 hours a day, 365 days a year; and a $7 environmental surcharge, which goes toward meeting the federal Clean Water Act requirements of mitigating sewer overflows by the year 2040. The base rate includes 2 hundred cubic feet (HCF) (1,496 gallons) of wastewater treatment.

3. What about wastewater treatment above 2 hundred cubic feet (HCF)?

For wastewater treatment beyond that included in the base rate, customers will be charged an additional variable surcharge of $5.24 per hundred cubic feet (HCF).

Water usage is determined by a "winter factor," which considers only average winter water usage. This ensures that SD1 does not charge customers for the treatment of water used for outdoor activities. Once your winter factor (e.g. 5 HCF) is established each May, you are billed for that amount of wastewater treatment all year.

4. If such a small percentage of SD1’s costs are fixed, why are you still charging a variable surcharge?

Over the next four years, the variable rate will continue to decrease to more closely reflect the actual variable cost of providing service. However, to establish total rate alignment immediately would require a base rate that is significantly higher than our current base rate, and we did not feel we could gain political or public support for such a program.

5. What is the environmental surcharge, and why do I have to pay it?

The environmental surcharge goes toward meeting the federal Clean Water Act requirements that SD1 eliminate 115 million gallons of sanitary sewer overflows and recapture 85% of the 1.5 billion gallons of combined sewer overflows that threaten public health and damage private and public property in Northern Kentucky each year. These requirements will be met by increasing capacity and using innovative storage solutions across the region to mitigate overflows. The projected cost for this work is hundreds of millions of dollars.

6. How is the environmental surcharge different from the storm water fee?

SD1 operates two separate utilities; a sanitary sewer utility and a storm water utility.

The environmental surcharge goes toward mitigating sanitary sewer overflows, which is a responsibility of the sanitary sewer utility.

The storm water fee funds the storm water utility, and goes toward repairing, maintaining and operating public storm water systems to better manage flooding and erosion, and monitoring water quality in local creeks and rivers to protect public health.

7. Previous rate increases were said to be the result of the Consent Decree, and now there is an environmental surcharge that covers the same thing. Why?

Over the past decade, it became clear that the cost of meeting the requirements of the initial Consent Decree would have a significantly negative impact on rates - far greater than the increases that were approved in years past. Some estimates were that the cost to meet the original Consent Decree requirements would necessitate rate increases of 300 to 400%.

As a result, SD1 negotiated with the Environmental Protection Agency and the Commonwealth of Kentucky an amended agreement that extends the end date to 2040, allowing us to meet the requirements of the Clean Water Act while stabilizing rates long-term. Still, no customer will see their rates go up by more than $5 per month in any of the next four years as a result of the new rate structure.

8. Why are low-volume customers seeing a rate increase while high-volume customers are seeing their bills decrease?

SD1 spent nearly two years researching our sanitary sewer service costs and rates, and concluded that the current structure’s focus exclusively on water usage is out of alignment given the high fixed costs of providing sanitary sewer service. The new system spreads fixed costs, which do not change based on how much water our customers use, equally among all customers.

Before a customer uses a single drop of water, SD1 has to maintain and operate every pipe, pump station and treatment plant 24 hours a day, 365 days a year to make it possible for you to flush your toilet, wash your dishes, or take a shower. Low-volume users will see their bills go up because under the previous system they were paying well below the actual cost of providing service, which has been estimated at $40 per customer per month. Low-volume customers will still pay less than high-volume users, but that gap will be shrinking over the next few years.

9. Why are you punishing water conservation by raising the rates of low-volume customers?

As stewards of our environment, SD1 applauds water conservation. High-volume customers will still pay more than low-volume users, but the gap will be shrinking over the next few years to more closely align rates with the actual cost of providing service.

10. When did this change take effect?

The base rate structure went into effect on July 1, 2019.

11. What about low-income and fixed-income customers who might be negatively impacted by this change?

Many low-income families will actually benefit from the change. The number one factor impacting water usage is the number of people living in the home, so those local families that are currently billed for the treatment of a large volume of wastewater will see their bills decrease. For qualifying low-income and fixed-income customers who do see an increase, SD1 is partnering with the Brighton Center on a Customer Assistance Program to help them adjust to the new structure. Learn more about the Customer Assistance Program.

12. Your website says this is a four-year realignment process. What does that mean?

For four years following the new base-rate structure, we will continue to adjust the base rate upward and the variable rate downward so that rates are more closely aligned with the actual cost of providing service. The base rates each year are:

• Fiscal Year 2020: $21
• Fiscal Year 2021: $25
• Fiscal Year 2022: $30
• Fiscal Year 2023: $34

During each of those years, the variable rate will decrease.

13. Does this change affect non-residential customers?

The base rate structure applies only to SD1 residential sanitary sewer customers. Our commercial billing structure is entirely different than our residential structure, and already relies on a "declining block" with three variable classes. In other words, the theory behind the base rate is already reflected in our nonresidential structure. However - any time there is a rate increase on residential service, the same rate increase will apply to non-residential service.

14. Did SD1 solicit public feedback before implementing this rate realignment?

Yes. There were eight public meetings and forums where customers and other concerned residents had an opportunity to learn more about the plan and give feedback. Each of those meetings was also televised, and a public hearing at SD1 was live-streamed on Facebook and has been viewed over 1,000 times.