For each type of service provided by the Sanitation District, such as centralized wastewater collection, on-site treatment or other services, the District shall review, devise and publish annually its schedule of rates and charges, which shall be based on 100% of the unsubsidized cost of providing such services, as provided in KRS 220.510. The following procedure shall guide the Sanitation District’s rate-making process. The Sanitation District is charged to adhere to this procedure, or any future amendments to the procedure as may be approved by the County Fiscal Court prior to their implementation.
(A) The Sanitation District shall invite three customers to work with the District’s board for a three-year period as a rate advisory committee to assist in establishing customer rates and charges such that:
(1) The initial rate and all future rates to be charged by the Sanitation District to all customers, by service type, shall be the same in dollar amount and shall be levied so as to recover the unsubsidized cost of providing the respective service. Rates shall be levied per 1,000 gallons of service provided, based on metered water service to each customer, and shall be charged monthly, by invoice showing metered amounts of flow and the total dollar amount to be remitted for wastewater service. If the wastewater customer’s water consumption is unmetered, the average usage of those on public water service in the county shall be applied to the wastewater customer for billing purposes.
(2) (a) With the advice of the rate advisory committee, the Sanitation District shall establish initial rates, which shall be based on:
1. The probable costs for providing such services; and
2. A comparison of the probable costs with the actual costs experienced by one or more comparably sized and equipped wastewater utilities in neighboring communities.
(b) The Sanitation District shall charge this rate for the period beginning with the start of operation of the facilities required for the service and continuing through the first full fiscal year (July 1-June 30) of operation of that service by the Sanitation District.
(3) (a) In February after the first full fiscal year (July 1-June 30) of operation of the facilities owned by the Sanitation District created by this chapter, and each February thereafter, the District board and rate advisory committee shall meet to review verified, historical cost information obtained from the Sanitation District’s records, audits, management interviews and other such informational sources as it deems appropriate, and compile this information into a cost study.
(b) The elements of the cost study shall generally conform to industry standards and shall include but not be limited to:
1. Personnel, electricity, chemicals, supplies, repair materials, vehicles and related operation costs, equipment and related operation costs, contract labor, contracted operations, lab testing costs, and other similar, documented costs; and
2. Timely retirement of any outstanding debt obligations secured by the Sanitation District to construct and maintain required wastewater facilities.
(4) The Sanitation District shall not allow charges to be calculated into the initial cost of service reports or subsequent reports for capital costs of replacement equipment or repair or replacement materials, or the cost of labor required to make such repairs or replacements to newly constructed or renovated facilities, due to the equipment and construction warranty period.
(5) Based on the annual cost of service analysis, the Sanitation District board, assisted by the rate advisory committee, shall present the proposed rates for service to the affected customers at a public hearing by March 1 of each year, for the subsequent, July-1-through-June-30 service period. The Sanitation District board shall respond to customer questions and take into consideration customer comments prior to voting to establish the final rate determination for the respective period. The Sanitation District shall provide written notification regarding any change in rates or charges to each customer affected.
(B) The Sanitation District shall comply with the public notification and hearing requirements for rate changes, in accordance with KRS Chapter 65A.
(C) A customer’s failure to pay wastewater charges, fees, or penalties may result in public water being shut off to the premises or the removal of wastewater service lines. The Sanitation District is authorized to contract with any public water provider to turn off and lock the water meter that serves a property in the event of non-payment for wastewater service, fees or penalties. The Sanitation District is further authorized to require payment of additional charges or service fees prior to the restoration of water service to the property.
(D) Any wastewater service charges that are owed to the Sanitation District are the responsibility of the owner of the property to which service is provided. The Sanitation District shall have the right and the fiduciary responsibility to use any and all appropriate means to secure payment for its services, as provided by law.
(Ord. 2021-07, passed 5-27-2021)