Special Board of Aldermen 10-14-2021 Page 17
Okay, what's in the dynamic sewer rate model? Well, it includes a list of all current accounts and assets by rate class, an
annual percentage usage by rate class, and the annual percent revenue by rate class. So that's the revenue side of the
equation that goes into the rate model. On the other side of that is the projection of expenses, including cash and capital
improvement plan debt service, as well as a breakdown of all your O and M costs. So that's your expenditure side.
Once all that is linked into the model, including the Capital Improvement Plan over a time schedule, then you can have
real time rate change selection. So you can select your rate changes whether they're increases or decreases and see
how it real time affects your fund balance. This also is a comparison in the model of the rate change impact to the
USEPA affordability index. That index is 2% of your household income. In 2023, Nashua is still at 1.4% based on the
current increases planned for 2022 and 23, which 23 was flat. So it's still well below the EPA average.
In conclusion, the sewer rates need to cover the cost to finance the capital investments that are required to comply with
the regulatory permits and avoid costly fines due to permit violations as a result of failed infrastructure. Despite the
recently approved increases, so we just went through the 20% increase in 2021, and we're looking at 15% increase in
2022. Nashua’s sewer charges in 2023 will still be lower than many of its peer utilities and well below current State New
Hampshire average household quarterly bill. Nashua rates remain affordable to all major household income brackets
based on the USEPA’s 2% affordability metric. We analyze that in quintiles. So from the lowest income to the highest
income, we break that out in 20% increments and we're still, you know, at the 1.4% in 2023.
Nashua has developed the integrated planning framework to further reduce the rate impacts of its required capital
investments. This initiative includes all capital projects linked into the rate model to accurately forecast the sewer rate
well into the future. So if we're seeing that this rate model is showing higher than normal rate increases, say further
down the road, what can we do to kind of mitigate that? We may be able to come up with a tiered rate structure. We
may be able to shift for capital projects that aren’t at risk further out into the future. The idea would be to try to get to a
cost of living increase over time so you're not getting spikes in the rate. Right now, no additional rate increases are
proposed that this time. Rates will be reviewed annually to determine if future adjustments are really needed. So | know
the city is moving all its accounts into a MUNIS system and at that time, you know, we'll be able to set running rate model
scenarios on the rate based on the city's Capital Improvement Plan.
President Wilshire
Thank you.
Frank Ayotte, Hazen and Sawyer
You're welcome.
President Wilshire
| have a question for Mr. Boucher. One of your first slides you mentioned combined sewers. We still have 86 miles of
combined sewers is that...?
Dave Boucher, Wastewater Superintendent
Yes, approximately 82.
President Wilshire
Okay and are we still working to separate those or no?
Dave Boucher, Wastewater Superintendent
Not to my knowledge not the current ones. Any future ones.
Frank Ayotte, Hazen and Sawyer
| can answer that. Right now we have in a long-term control plan submitted to the USEPA that only includes separation
of a small area related to | believe CSO8. We also have control recommended for the one-year storm. T hose are
technical terms but right now it does not include full separation of the city.
