.ENVIRONMENTAL PROTECTION AGENCY
ROCKY MOUNTAIN-PRAIRIE REGION
USER CHARGES AND INDUSTRIAL COST RECOVERY
DENVER SMSA
JANUARY 1974
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USER CHARGES AND INDUSTRIAL COST RECOVERY
DENVER SMSA
by
George H. Aull, Jr.
Thomas F. Jones
William G. Stringfellow
WILBUR SMITH AND ASSOCIATES
Denver, Colorado 80222
for the
ENVIRONMENTAL PROTECTION AGENCY
Region VIII
Contract No. 68-01-1864
January 1974
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EPA REVIEW NOTICE
This report has been reviewed by the Environmental
Protection Agency and approved for publication.
Approval does not signify that the contents necessarily
reflect the views and policies of the Environmental
Protection Agency, nor does mention of trade names or
commercial products constitute endorsement or
recommendation for use.
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ABSTRACT
This is a report of investigations made of the extent
to which wastewater user charges, consistent with current
federal regulations and guidelines, have been adopted
by municipal and special district wastewater agencies
within the Denver Standard Metropolitan Statistical Area.
Compliance with these guidelines has been established
as a prerequisite for award of federal construction grants
for wastewater treatment facilities.
Three wastewater agencies within the Denver SMSA were
selected for more detailed analyses of current user charge
schedules. The existing schedules of rates and charges
were compared to schedules derived in the study through
rational cost allocation and application of model user
charge systems developed by Environmental Protection
Agency. Volume, strength and flow rates are among the
waste characteristics considered in developing cost alloca-
tions and revenue structure. Hypothetical examples were
also developed to illustrate the possible impact of the
industrial cost recovery features of federal regulations
and guidelines upon local user charge schedules.
A special inquiry was made into the state of eligibility
for construction grants of regional wastewater treatment
and disposal agencies in the light of revenue methods
employed by their direct and indirect subscribers.
Possible corrective actions were outlined.
Previous study findings were reaffirmed that a number of
wastewater agencies within the Denver SMSA have not
established or maintained user characteristic and treat-
ment cost data in a form or to the extent necessary to
design equitable user charges, and thus fail to comply
with current federal guidelines for eligibility for
construction grants.
This report was submitted in fulfillment of Contract
Number 68-01-1864 under sponsorship of the U. S.
Environmental Protection Agency.
ill
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CONTENTS
Section
I
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
Conclusions
Recommendations
Introduction
Study Background and Objectives
Study Area
Scope of Work
User Charges within the Denver SMSA
Sewer Service Charges
Sewer Connections by Class of User
Denver Industrial Waste Program
Specific Analyses of User Charges
User Charges
Effluent Parameters
North Washington Street
North Table Mountain
Arvada
Industrial Cost Recovery
Recovery of Grant Funds
Hypothetical Example for Recovery of
Grant Funds
Relating Example to Local District
Industrial Allocation of Capital Grant
Recovery Charges
Prerequisites to a User Charge System
Public Acceptance
Industrial Data
Accounting and Cost Allocation
User Charge Schedule
Adopting Ordinance
Operating and Management Plan
Plan Update
Transitional Steps
Regional Wastewater Agency
Acknowledgement s
References
Bibliography
Glossary
Appendices
5
5
6
7
11
11
14
16
21
21
22
25
42
59
69
69
71
76
86
95
95
95
96
97
98
98
99
100
101
103
105
107
111
115
v
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FIGURES
Page
Wastewater Service Area
Denver SMSA 8
Industrial Rate Calculation Formula,
North Washington Street Water and 37
Sanitation District
VI
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TABLES
1 Sewer Service Charges - Selected Munici-
palities and Sanitation Districts - 1972 12
2 Sewer Connections by Type of User -
Selected Municipalities and Sanitation
Districts - 1972 15
3 City of Denver Industrial Categories - 1971 18
4 Effluent Flow Per Tap - Selected Sanitation
Districts - 1972 23
5 Effluent Content - Selected Sanitation
Districts - 1972 24
6 Calculation of Base Domestic Flow,
Biochemical Oxygen Demand and Suspended
Solids - Selected Municipalities and
Sanitation Districts - 1972 26
7 Calculation of Base Domestic Flow, BOD and
SS - Selected Municipalities and
Sanitation Districts - 1972 27
8 Calculation of Base Domestic Flow, BOD
and SS 28
9 Comparison of Tons of Domestic Content
Level - Study Municipalities and
Sanitation Districts 29
10 Sewage Costs by Function - North Washington
Street Water and Sanitation District -
Year Ended November 30, 1972 31
11 Calculation of Total and Unit User Charges
by Function - Based on MDSDD #1 Allocation
Formula - North Washington Street Water
and Sanitation District - 1972 32
12 Calculation of Total and Unit User Charges
by Function - Based on WSSA Allocation
Formula - North Washington Street Water and
Sanitation District - 1972 ^ 33
13 Calculated and Actual Charges for Measured
Industries Using MDSDD #1 Allocation
North Washington Street Water and Sanitation
District - 1972 35
viz
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No.
14- Calculated and Actual Charges for Measured
Industries Using WSSA Allocation -
NWSW8SD - 1972 36
15 Applicable Charge Per 1000 Gallons Flow
with Base Effluent Content -
NWSW&SD - 1972 38
16 Estimated Flow and Loadings by All Users
NWSW&SD - 1972 40
17 Estimated and Actual Charges by All Users
NWSW&SD - 1972 41
18 Sewage Costs by Function - North Table
Mountain Water and Sanitation District
Year Ended November 30, 1972 44
19 Total and Unit User Charges by Function
Based on MDSDD #1 Allocation Formula -
NTMW&SD - 1972 45
20 Total and Unit User Charges by Function
Based on WS&A Allocation Formula
NTMW&SD - 1972 46
21 Estimated Flow and Loadings by All Users
NTMW&SD - 1972 48
22 User Share of System Load Based on Estimated
Loadings (Table 21) - NTMW&SD - 1972 49
23 Adjusted Flow and Loadings Based on
Estimated Share Allocation (Table 22) -
NTMW&SD 50
24 Calculated and Actual Charges for Measured
Industries Using MDSDD #1 Allocation-
NTMW&SD - 1972 52
25 Calculated and Actual Charges for Measured
Industries Using Revised (WSA) Allocation -
NTMW&SD - 1972 53
26 Adjusted Annual Flow Quantities Based
on Allocated Usage (Table 23) -
NTMW&SD - 1972 54
27 Adjusted BOD and SS Levels Based on Allocated
Usage by User Class - NTMW&SD - 1972 55
Vlll
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No. Page
28 Applicable Charge Per 1,000 Gallons Flow
Based on Adjusted Effluent Content and
Revised Flow Allocations - NTMWSSD - 1972 57
29 Estimated and Actual Charges by All Users -
NTMWSSD - 1972 58
30 Total Flow and Loadings - City of Arvada -
1972 60
31 Sewage Costs by Function - 1972 62
32 Calculation of Total and Unit User Charges -
by Function - Arvada Wastewater Control -
1972 * 63
33 Calculation of Total and Unit User Charges
By Function - City of Arvada - 1972 64
34 Applicable Charge Per 1000 Gallons Flow
With Base Effluent Content - City of
Arvada - 1972 65
35 Estimated and Actual Charges by User Class -
City of Arvada 67
36 Determination of Allowable Costs and PL 92500
Grant - Example of Treatment Facility
Capital Costs Chargeable to Industrial
Users 72
37 Eligible and Ineligible Project Cost Items
Total and Grant Portion - Example of
Treatment Facility Capital Costs Chargeable
to Industrial Users 73
38 Grant Project Items Allocated to Flow, BOD
and SS (Example) 74
39 Assumptions - Example of Treatment Facility
Capital Costs Chargeable to Industrial Users 75
40 Grant Recovery From Industry - Example of
Treatment Facility Capital Costs Chargeable
to Industrial Users 77
41 Current and Assumed System - NTMWSSD 78
42 Future Industrial Users Assumed Effluent
Levels 80
IX
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No.
Page
43 Assumed Costs by Function - NTMW8SD -
(in 1972 dollars) 81
44 Assumed Total and Unit User Charges -
NTMWS SD 82
45 Calculated Charges for Industries Based
on Assumed Conditions - NTMWSSD 83
46 Applicable Charge Per 1,000 Gallons Flow
Based on Content and Flow Assumptions
NTMW&SD 84
47 Estimated Charge for All Users Based on
Assumed Conditions - NTMW&SD 85
48 Existing Industrial Users-Assumed Future
Effluent Levels - Year 1 88
49 Allocation of Capital Grant Recovery Three
"Existing" Industries - Year 1
(Annual Charge) 89
50 Future Industrial Users-Assumed Effluent
Levels - Year 2 90
51 Allocation of Capital Grant Recovery - Seven
"Future" Industries - Year 2 (Annual Charge) 91
52 Hypothetical Cost Recovery Schedule -
Industrial Allocation 93
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SECTION I
CONCLUSIONS
1. A basic non-compliance with EPA guidelines exists within
many jurisdictions because of the initial financing mechan-
isms and current financial practices.
2. Accounts classification and cost allocation systems
of many wastewater agencies are totally inadequate as bases
for formulating equitable user charges.
3. User classification systems are poorly developed. The
Standard Industrial Classification Manual system (SIC) is not
broadly applicable to individual users and is difficult to
apply. Loading characteristics vary greatly between
industries, even of the same type.
4. While not all agencies have industrial users, very few
are staffed and equipped to administer an industrial waste
program. As a consequence, user characteristic data is
currently not available in most instances.
5. An opportunity exists for cooperative or joint action
in formulating and implementing industrial waste programs.
6. The continuing eligibility of Metropolitan Denver Sewage
Disposal District No. 1 (MDSDD #1) to receive Federal
construction grants is threatened because not all of its
direct or indirect subscribers have established equitable
industrial user charges.
7. The content and implications of User Charge and Industrial
Cost Recovery guidelines is not widely understood by
wastewater agencies.
8. Sewer service charges to customers outside the district
may be higher than charges to customers inside the district
only if additional costs are actually incurred to serve
those customers.
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SECTION II
RECOMMENDATIONS
1. The State of Colorado should promulgate a uniform
system of accounts and cost allocation methods for waste-
water functions for all public wastewater agencies within
the State.
2. , The Denver Regional Council of Governments or MDSDD
#1 should sponsor seminars or training classes in the
classification and maintenance of accounts, cost alloca-
tions, requirements of EPA Regulations and Guidelines,
and establishment of industrial waste programs.
3. The Metropolitan Denver Sewage Disposal District No. 1
Service Contract should be amended by voluntary action
of the members, or by State legislation, to require the
enactment and maintenance of equitable wastewater user
charges by all subscribers.
4. MDSDD #1 should consider providing contractual
staff services to its subscribers in accounting, billing,
rate review, sampling and testing programs, etc., on
a service bureau basis.
5. The EPA should permit and assist in development of a
staged approach to compliance with guidelines to achieve
optimum results.
6. When possible, the emphasis should be placed on user
rather than user class in developing charge schedules.
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SECTION III
INTRODUCTION
Study Background and Objectives
Under date of April, 1973, the U. S. Environmental Protection
Agency, Region VIII, issued the report Financial and
Institutional Arrangements for Wastewater Management -
Denver SMSA, covering sixteen wastewater agencies. Among
the findings of that study was that certain of the waste-
water agencies did not systematically maintain operating
and financial records or procedures to insure that cost
burdens were being equitably apportioned among the
various users or user classes.
The previous study noted that there are currently more
than one hundred agencies within the Denver SMSA which
provide sewage collection and/or treatment and disposal.
These range from very small sanitation districts,
performing collection only, to the large Metropolitan
Denver Sewage Disposal District No. 1 (MDSDD #1) which
provided treatment and disposal for the wastes generated
by 22 member agencies which serve a population of almost one
million persons. The extent of inter-agency agreements
for wastewater handling is substantial.
The subsequent issuance by the Environmental Protection
Agency of regulations and guidelines on user charges and
industrial cost recovery'^' has raised questions and
considerations as to the extent of compliance by wastewater
agencies in the Denver SMSA, the means by which compliance
might be achieved, and the implications upon the eligibility
of regional treatment and disposal agencies for federal
grants for construction of treatment works.
This current study is designed to determine the degree
and extent of compliance by selected wastewater agencies
with EPA rules and regulations regarding user charges and
industrial cost recovery, (and thus the eligibility for
construction grants). The implications of this_inquiry
go beyond the concern for the practices of the individual
agencies. MDSDD #1, for example, receives_the wastes of_
22 member agencies, many of whom also receive and transmit
wastes from other originating agencies. Literally
translated, the regulations and guidelines restrict the
eligibility of MDSDD #1 to receive needed construction grants
without compliance with those rules and regulations by all
direct and indirect subscribers.
This study, then, is an extension of the previously-cited
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study in order to ascertain the extent of compliance with
the rules and regulations and their impact upon financial
and institutional arrangements for wastewater management
in the Denver SMSA.
Study Area
The study area, which is coterminous with the Denver
Standard Metropolitan Statistical Area, consists of 3,661
square miles within five urban counties including and
surrounding the City and County of Denver, Colorado,
namely, Adams, Arapahoe, Boulder, Jefferson and^Denver.
The area is a dynamic, rapidly-expanding area with many of
the problems and opportunities which confront an area
with rapid population and economic growth.
In 1970 approximately 1,227,529 persons resided in the five
county area, which represented 55.6 percent of the total
population of the State of Colorado. The study area's
population doubled between 1950 and 1970. This growth
accounted for 70 percent of the population growth of the
State during this period. Estimates made by many different
agencies indicate that the Denver SMSA's growth is
expected to continue for quite some time. For example,
a reasonable estimate of future growth might be that
as projected for the Regional Transportation District which
projects the 1990 population to be 1,818,000, an increase
of approximately 30,000 persons annually.
Corresponding to this rapid population growth has been an
increase in the number of public and quasi-public agencies
charged with the provision of public services required by
the expanding population. In fact, the area has witnessed
a proliferation of such agencies to the point that there
are frequent instances of overlapping boundaries and
jurisdictions, duplication of efforts, and lack of clarity
as to authority and scope.
There are forty-four incorporated municipalities in the
metropolitan area, most of which provide and maintain their
own sewer systems. In addition, there are 238 special
purpose districts (excluding school districts). A majority
of these special purpose districts are sanitation, water,
or water and sanitation districts.
The Denver metropolitan area has expanded in the pattern
fashioned by most other urban areas. Development
patterns are the traditional ones, with a commercial/
industrial city center, residential suburbs and, presently,
the development of shopping centers and other decentralized
facilities outside of the center city. As the area has
developed, an extensive system of sewers has evolved which
covers most of the developed areas and which is
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administered by a great many autonomous and semi-autonomous
agencies.
Some bypassing of vacant lands has occurred. This has
had some impact upon the cost of public services, such as
sewer collection, interceptor or pumping costs. This may
be of increasing concern as development extends into outer
reaches of the study area.
Population growth and, consequently, land use, is expected
to continue much as it has in recent years. The areas
adjacent to Denver will undergo substantial residential
development, particularly to the south, southeast, southwest,
and north. Growth in these areas already is occurring and
little is anticipated to hinder development in these dir-
ections. This study has sampled wastewater agencies in
several of these growth areas, as well as in areas that
have not been expanding.
Scope of Work
The scope of work involved the review of data compiled in
the preceding study for 16 wastewater agencies, the collec-
tion of similar data on all MDSDD #1 members not previously
investigated, and detailed.analyses of the current
practices of 3 agencies with respect to requirements
for compliance with regulations and guidelines for user
charges and industrial cost recovery. Figure 1 shows the
wastewater service area within the Denver SMSA. However,
only those agencies subscribing to service from MDSDD #1
were included in this investigation.
Considerable attention was focused on the financial, legal
and physical arrangements necessary to achieve compliance.
Special inquiry was made into the effect upon eligibility
of MDSDD #1 as a result of the practices of its subscribers.
The investigations involved consultations with numerous
officials of wastewater agencies and the Environmental
Protection Agency and extensive literature research. In
performing the calculations and analyses, it was frequently
necessary to develop assumptions; where this was necessary,
the best sampling of available advice and experiences was
sought.
The level of effort designed for this study was geared to
the use of available data and did not include provisions for
wastewater testing, detailed cost of service analyses, or
requirements to define and establish model wastewater flow
and contribution criteria (i.e., levels for normal domestic
sewage). This report is intended to provide general
procedural steps and methods by which the user charge and
capital cost recovery guidelines can be applied.
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SERVICE AREA
WASTEWATER SERVICE AREA
DENVER SMSA
FIGURE I
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It should be emphasized that many cost allocations, flow
volumes, strength concentrations and other factors are
general averages or are based on assumptions. Where this
was necessary, the most appropriate available data, advice
and experience were used. However, these assumed allocations
and factors will vary considerably from district to district
and area to area. If anything can be stressed from this,
it is that all pertinent factors must be analyzed by each
district and accurate values determined for use in this
program. The use of inaccurate variables or inconsistent
assumptions can greatly affect the equitability and
application of this program.
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- SECTION IV
USER CHARGES WITHIN THE DENVER SMSA
Sewer Service Charges
A primary purpose of this study is to identify the means by
which various wastewater agencies within the Denver SMSA
levy service charges upon industrial users. In the previous
study, 9 municipalities, 6 sanitation districts and MDSDD #1
were sampled. For this study, each of these agencies
was again contacted and data contained in the previous study
were brought up to date. To provide a broader data base,
two additional municipalities and 12 additional districts
were contacted. Sewer service charge data for the 29
agencies are presented in Table 1.
Municipal Agencies - All of the municipal agencies sampled
charge a specific fee for supplying sewer service to their
users. These fees vary from municipality to municipality
and according to the class of user. Residential users
are generally charged on a per-unit fixed fee basis, or
a percentage of the water bill, or a combination of both.
Municipal commercial user schedules are generally more
responsive to demand as necessitated by the heterogeneity of
this class of user. In most municipalities, commercial
users are charged based on a percentage of the water bill
or on the volume of use. In some cases, commercial users
are charged on a flat rate based on potential water usage or
according to the number of contributing fixtures.
Although some wastewater agencies either have no industrial
users or do not classify them separately from commercial
users, each of the municipalities sampled has a procedure
established for determining industrial user charges. As
with commercial rates, Denver, Thornton and Westminster
establish rate schedules or negotiated contracts based on
flow and loadings. Aurora does provide for negotiated
contracts with industrial users but has none so
classified at this time and has established no basis for
negotiated charges.
Sanitation Districts - Sanitation, or combined water and
sanitation districts are generally much smaller in terms
of the number of users and exhibit a much wider variety of
methods for determining user charges. In 9 of the 19
districts, residential users are charged on a per unit
basis. Mill levies (ad valorem property taxes) are used
as the means of user charge in 4 districts, and a combined
unit charge and mill levy is used in 3 districts. One
11
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SEWER SERVICE CHARGES
elected Municipalities and Sanitation Districts
1972
TYPICAL MONTHLY SERVICE CHARGE
JURISDICTION
Municipalities
BASIS OF SERVICE CHARGE Residential'
Residential
Arvada Per unit
Aurora Per Unit
Boulder Per Unit plus
per Water Use
Broomfield Per Unit
Denver
Eng lewood
Golden
Littleton
Longmont
Thornton
Westminster
DISTRICTS
Alameda
App lewood
Bancroft
Berkeley
Brighton
Crestview
East Lakewood
Fruitdale
Highland Park
Lafayette
North Pecos
North Table Mountain
North Washington street
North West Lakewood
Pleasant View
South Adams
Westridge
Wheatridge
Percent of ,K*
Water BilllD;
Per Unit
Per Unit plus
per Water Use
Percent of
Water Bill
Percent of
Water Bill
Per Unit
Per Unit
Mill Levy
Mill Levy
Included in Water
Bill and Mill Levy
Per Unit
Per Unit
Per Unit plus
Mill Levylc)
No Charges
Per Unit plus
Mill Levy
Mill Levy(f)
Per Unit
Per Unit
Per Unit'5'
Per Unit
Per Unit plus
Mill Levy
Per Unit
Per Unit
Mill Levy
Commercial Industrial In District i
Meter Size Meter Size and
Type of Discharge S2.23
Water Consumption None 1.50
Meter Size plus Meter Size plus per
per Water Use Water Use 2.75
Per Unit plus per- Per Unit plus per-
cent of Water Bill cent of Water Bill 3.50
Percent of Water Type and Amount
Bill(b) of Discharges 3-25
Number of Fixtures Percent of Water
Bill 1.25
Water Consumption Water Consumption 1.50
Meter Size Meter Size 2.25
Bill Bill 3.70
Bill
Per Water Use Negotiable Contract 3.00
Water Consumption No Schedule NA
Water Consumption Water Consumption
plus Mill Levy plus Mill Levy NA
Water Consumption Water Consumption NA
Number of Fixtures Number of Fixtures 3.00
Variable by Type(d) Contract 3.00
Bill with Minimum Charges plus 30
Charge Percent 2.00
None None
Per Unit Fixture Units,or
Percent of Water Bill,
or Negotiated 2.00
Per Unit Established by
District Board
Per Unit or Per- Percent of Water
cent of Water Bill Bill 3.00
Number of Fixtures Number of Fixtures or
or Percent of Percent of Water Bill
Water Bill 3.00
Percent of
Water Bill By Contract 4.00
Number of Several Methods :
Fixtures (1) Number of Facilities
(2) Water Usage
(3) Type and Amount of
Discharge
(4) Con tract
Fixture Fixture Examination"1' 1.50
Examination1"'
Fixture (h. Fixture Examination 2.00
Examination1 '
Water Consumption Water Consumption 2.00
Mill Levy Mill Levy NA
Per Unit Water Consumption None Established 1.00
Ca) Assumes 7,000 gallons of water per month in winter; 10,000 gallons per month average.
(b) Percent of water bill if inside city; per gallon or per unit if outside of city.
(c) Percent of water bill for hotels and motels. If water received from other sources rate is SI 50 per unit
hotels and motels with differential rates set up for other commercial users.
(d) Depending on the type of user charge may be based on facility, number of units, composition of effluent or
percent of water bill. '
(e) Unit has 19 fixtures.
(f) Per unit for multi-family with equivalencies determined independently in each case.
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district (Bancroft) has a combined water-sewer bill as
well as a mill levy, and one (East Lakewood) makes no
charge on its users. In those districts where a typical
monthly rate could be determined, charges ranged from
a low of $1.00 (North Washington Street and Wheatridge)
to $4.00 (North Table Mountain).
Determination of commercial user service charges in the
sanitation districts varies considerably in method when
compared to the municipal charge structures. One
district (Brighton) bases its charge on the type of user
and, in some cases, may sample effluent content. This is
the only district currently employing such procedures.
Within the remaining 17 districts, 8 different methods for
determining commercial service charges were found. Most
common is a charge based on water usage or billing (6
districts). A charge based on the number and type of
fixtures is used in 4 districts, and a unit charge is levied
in 2 districts. The remaining 5 districts each employ a
unique scheme of commercial user charges as shown in
Table 1.
A means of determining industrial user charges has not been
established in 3 districts. In those districts with
established methods of determining industrial user charges
there is, as with commercial users, a great deal of
variation. Charges based on water consumption are used in
3 districts, and charges based on the number of fixtures
in 3 districts. Negotiated contract is the method used by
2 districts. Three districts use a variety of methods
depending on the type of user. A mill levy is used by one
district, charges are established on an individual basis
by the district board in another, and one district bases
its charges on the MDSDD #1 charges.
Summary - From the foregoing it is apparent that there is no
standard, universally applicable method utilized for user
service charge determination. Nevertheless, the per unit
charge or mill levy, which is commonly applied to residential
users, would be equitable only so long as (1) residential
users are relatively homogeneous in terms of system demand;
(2) revenues cover the costs of serving residential users;
and (3) residential properties do not cover a wide range
of valuation.
Service charges for commercial and industrial users are
not generally levied on a flat rate basis, which indicates
recognition of the equity and the necessity of charging
these users on a basis bearing some relationship to the
flow and loadings placed on the sewerage system. An
important aspect of this study is the review of the
industrial rates used by selected agencies and their
relationship to costs actually incurred in the treatment
of industrial wastes.
13
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Sewer Connections by Class of User
To further inventory the characteristics of the various
sanitation districts in the metropolitan area, each of the
16 agencies investigated in the original study was again
contacted in order to ascertain any changes in the number
of users by type or class. Two additional municipalities
and twelve additional sanitation districts were investigated.
This represents a significant expansion of the data base
for the extended study. Number of users by class is shown
in Table 2.
Traditionally, three distinct types of users are identified
for classification and ratemaking purposes: "residential,"
"commercial" and "industrial." Occasionally, "public" or
"institutional" is cited as a fourth category, but in most
cases these users appear to fall under the residential and/or
commercial classifications. Classification of users is
usually based on structure use. For example, a living place
would be residential, retail or wholesale facilities or office
buildings would be commercial, and industrial might
cover all forms of industry -- light and heavy. Class-
ification is occasionally on land use or the zoning
category of the property. In many cases the classification
is judgmental and is thus susceptible to wide ranges of
interpretation and, of course, error.
It is also possible for a classification of user (i.e.,
hospital)to be included as an "industry" for purposes of
levying a user charge because of atypical discharge
characteristics, but to be classified as commercial/
institutional for purposes of capital grant recovery
and thus not required to participate in grant repayment.
Because wastewater collection, treatment and disposal are
responsive to flow and loadings, a different classification
scheme, or the development of more appropriate classification
criteria may be required. Ideally, such a classification
scheme should provide the local wastewater a,gency with an
immediate reference as to the impact of a specific facility
on the local sewerage system and treatment works. Obviously,
the only way to know the contribution of each user is to
measure the contribution of each user. Such an approach
is frequently both impractical and unnecessary. It may
be impractical simply from the logistics and cost involved.
It may be unnecessary for all users because the majority
of users are usually dwelling units with relatively
homogeneous sewage characteristics. Within defineable
statistical bounds, it should be possible to estimate the
average domestic flow and loadings of these units. What
is needed is a means of identifying the unusual user --
the one who contributes at a rate (either content or flow)
exceeding that of the domestic user.
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Table 2
SEWER CONNECTIONS BY TYPE OF USER
Selected Municipalities and Sanitation Districts
1972
MUNICIPALITIES
Arvada
Aurora
Boulder (a)
Broomf ield
Denver
Englewood
Golden
Littleton
Longmont
Thornton
Wes trains terla>
DISTRICTS
Alameda
Applewood
Bancroft
Berkeley
Brighton )
Lafayette
North Pecos
North Table Mountain
North Washington Street
North West Lakewood (a>
Pleasant View(a>
South Adams
Westridge
Wheatridge
Residential
Number
15,218
NA
14,627
3,686
110,229
22,693
2,987
NA
7,962
15,297
5,402
2,650
708
5,084
50
2,437
4,310
296
555
194
1,952
80
1,200
2,217
3,972
980
4,466
1,650
8,236
Per Cent
97.5
-
91.8
97.0
85.5
93.3
93.8
-
93.3
97.1
96.4
99.3
100.0
98.5
98.0
89.1
95.0
100.0
93.4
95.1
94.8
72.1
98.8
90.7
97.7
98.0
79.7
99.1
86.3
NUMBER OF TAPF
Commercial
Number
372
NA
1,100
103
18,520
l,630(c)
163
NA
573
454(0)
202
19
0
76
1
297
225
0
38
10
103
31
10
204
93
15
l,140(c)
15
1,306
Per Cent
2.1*
_
6.9
2.7
14.4
6.7
5.1
-
6.7
2.9
3.6
0.7
0.0
1.5
2.0
10.9
5.0
0.0
6.4
4.9
5.0
27.9
0.8
8.3
2.3
1.5
20.3
0.9
13.7
Industrial
Number
17
NA
200
11
121 (d>
.(0
35
2
_(c)
_Ğ=>
1
0
0
0
0
0
1
0
1
0
5
0
5
24
0
5
_<<=>
0
0
Per Cent
0.1
_
1.3
0.3
0.1
0.0
1.1
0.0
-
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.2
0.0
0.4
1.0
0.0
0.5
-
0.0
0.0
TOTAL
15,607
23,000
15,927
3,800
128,870
24,323
3,185
8,200
8,535
15,751
5,604
2,669
708
5,160
51
2,734
4,536
296
594
204
2,060
111
1,215
2,445
4,065
1,000
5,606
1,665
9,542
(a) Statistical differentiation between user classes not available. These figures were approximations made by the
appropriate municipal and district officials.
(b) Does not include taps in private system which connects with Highland Park.
(c) Commercial and industrial combined.
(d) Classified as having industrial wastes
NA - Not Available.
Note: Public facilities, e.g., schools, libraries are included as commercial.
In most cases the industrial class is defined by sewage discharge rather than type of business establishment.
15
-------
As previously noted, the agencies included in this study
employ a variety of techniques for classifying users and
often do not differentiate between commercial, institutional
or industrial users, but treat them as a single class.
The number and per cent distribution of the various classes
of users in each classification was indicated in Table 2.
Denver, with 128,870, has by far the largest number of user
taps. Of those sampled, the wastewater agency with the
smallest number of taps is the Berkeley Water and Sanitation
District, with 51 taps. A characteristic of each of the
agencies is the high proportion of residential taps and the
very small proportion of users classed as commercial and,
especially, industrial. Three observations can be made
regarding this distribution of users: (1) in most
communities, commercial and industrial land uses comprise
a small proportion of the total; (2) commercial and industrial
classification schemes are not well defined; and (3) with the
exception of the City and County of Denver, most of the
agencies serve areas predominently suburban in character
with a correspondingly low number of commercial and
industrial users.
To a certain extent, the deficiencies in the classification
schemes (representatives of several of the districts could
only estimate the proportion of non-residential users)
represent preferential treatment to some users. This may
or may not have been the intent of the agency. Agencies
which do not differentiate between classes may knowingly
or unknowingly be causing certain classes of users to
subsidize others. In another vein, some communities or
agencies may offer a lower rate to commercial or industrial
establishments to induce them to locate in the community.
While investigations undertaken in this study have not
revealed evidence of this, it may be that the practice
exists. Editorially speaking, a long-range effect of the
EPA guidelines will be to minimize this competitive tool
in seeking industrial development.
Denver Industrial Waste Program
The City and County of Denver Wastewater Control Division
has been addressing this problem for over 6 years, and has
been generous in sharing the results of its experience.
A description of its program may be enlightening.
An extensive sampling program was initially conducted
covering approximately 90 industries, and a two year
average of samples was used to determine an industry
"strength index." This strength index, a factor of flow
and content (BOD and SS), has been in effect for four
years.
16
-------
Each industry is billed monthly on this constant index
unless there should occur a significant change in oper-
ations which warrants adjustments of the index in re-
classification of the industry. All industries for which
physical provisions are available are sampled 3 or 4 times
per year to insure that current discharge relates to the
assigned strength index. If not, the index can be revised
to reflect current loadings.
When a new industry comes on-line, it is required to make
physical arrangements for sampling locations and facilities.
Each new industry is assigned a "group parameter" based on
the type of industry; its flow and loadings are then
sampled 8-16 times to establish a base for an individual
strength index.
The Denver Wastewater Control Division, based on the original
extensive sampling program, has established industry classes
and assigned average group parameters for BOD and SS
loadings for each of these classes. These group parameters
have also been assigned to industries in the same general
classification which had not been individually sampled.
In 1970, there were 116 industries in Denver on which data
were available, 62 of which were being sampled and 54 of
which had been assigned group parameters. Table 3 breaks
down the 5 existing industrial classifications and indicates
the average effluent of sampled firms and the parameters
for each group when they could be determined.
Similarly classified industries are not necessarily assigned
the same parameters. For example, in class B, for milk
processors, there are three firms which are not currently
being sampled. Two of these are assigned average BOD
levels of 1913 ppm (mg/litre) and SS levels of 552 ppm.
A third is assigned a BOD level of 956 ppm and SS level of
552 ppm.
In class C, for industrial laundries, one has been assigned
a BOD level of 996 ppm and an SS level of 954 ppm, while
the other was assigned levels of 340 ppm (BOD) and 497
ppm (SS).
Other examples are evident in Group D, where industries
within the same class and described as the same type are
assigned different parameters. These differences may be
a result of various causes: pre-treatment, dilution of
wastes by use of larger quantities of water, differences in
the type, method or hours of operation, or other factors
established by investigation.
Another variation noted in Table 3 is that many of the group
parameters differ considerably from the average values
17
-------
H
oo
Table 3
CITY OF DENVER INDUSTRIAL CATEGORIES
1971
No. industries
Effluent
Industry
Class
A
B
C
D
E
Totals
Type of No.
Industry
Meat and meat processors
Dairies and milk products
Butter and Cheese
Ice cream
Milk
Laundries
Industrial
Commercial
Food Processors
Bakeries
Soft drink bottlers
Food vendors
Corn/potato chips
Canneries
Miscellaneous
(serum, tanning, rendering
industries
sampled
20
0
0
4
17
8
9
18
4
5
2
4
3
3
, fabrics)
62
Average
BOD
1042
_
1650
509
457
556
1488
2376
679
825
1303
2342
755
Effluent
SS
661
_
_
528
442
491
399
671
695
163
584
1759
93
820
assigned
parameters
18
3
3
3
2
6
8
2
2
2
3
2
54
Parai
BOD
952
1000
600
1913U
neter
SS
623
500
240
uncertain
734
2376
798
571
695
138
uncertain
uncertain
uncertain
577
121
Note - Uncertain indicates that different parameters were used for industries within the same class
and described as the same type.
(1) One industry of this type assigned a different BOD value (956).
Source: City/County of Denver Wastewater Control Division
-------
assigned to sampled industries. In only one case (bakeries)
do the two values agree exactly. In others, such as commer-
cial laundries, the assigned parameters are higher than
the average sampled industries (734 vs. 566 ppm BOD and
571 vs. 399 ppm SS). In a reverse situation, Class E
users are assigned parameters considerably below averages
determined from sampled industries.
These comments concerning the industry classification and
effluent parameters of the Denver Wastewater Control
Division are cited to demonstrate the diversity of condi-
tions identified in the Division's Industrial Waste Program,
and its approach to complex and difficult problems.
Initiating this program well in advance of the issuance of
the E.P.A. guidelines, which now require these very types
of considerations, Denver has been a leader in its efforts
to assess charges to industrial users in relationship to
the system loadings which they contribute.
These comments are intended to show, to some degree, the
complexities of an industrial waste program, and that
average effluent content even within industries of the
same type can vary greatly. For example, within Class A
(meat and meat processors) for sampled industries, BOD
levels ranged from 362 ppm to 2,778 ppm and SS levels ranged
from 191 ppm to 2,624 ppm. Even on sub-categories levels
varied greatly. For milk processors, BOD levels ranged
from 473 ppm to 4,206 ppm and SS levels ranged from 199 ppm
to 1,187 ppm; for bakeries, BOD levels ranged from 817 ppm
to 3,927 ppm and SS levels from 353 ppm to 1,343 ppm.
These findings illustrate the inequities which may be
inherent in user charge systems applied blindly to standard
classes and sub-classes.
Difficulties of industrial classification and assignment
of group effluent parameters were encountered throughout
the course of this study. The Denver data and experience
tend only to amplify these difficulties and to substantiate
problems which must be resolved. Ideally, every industry
and commercial concern which would possibly contribute
system loadings in excess of "normal domestic sewage" should
be sampled and evaluated on its own merits. The possible
impracticalities of this solution, coupled with the
difficulties of group classification, are but two of the
challenges of the current EPA guidelines.
Yet, these very problems provide the substantive basis and
justification for the user charge guidelines - that each
user should pay its fair share.
19
-------
SECTION V
SPECIFIC ANALYSES OF USER CHARGES
User Charges
Federal guidelines regarding the establishment of user
charges for operation and maintenance of publicly owned
treatment works state that:
"Federal grant applicants shall be awarded grants only
after the regional Administrator has determined that
the applicant has adopted or will adopt a system of
charges to assure that each recipient of waste
treatment services will pay its proportionate share
of the costs of operations and maintenance, including
replacement.'^)
The guidelines also provide that:
"The user charge system shall generate sufficient
revenue to offset the cost of all treatment works
operation and maintenance provided by the grantee."
As discussed in Section IV on sewer service charges, the
rate schedules used by the various wastewater agencies in
Denver are not consistent, nor are the schemes which are
utilized for classifying users. The purpose of this section
is to examine three agencies in the Denver area which have
established rate schedules recognizing volume, flow and
loading characteristics as rate making variables, and also
currently have industrial users subject to these schedules.
In this evaluation, the three primary variables of flow, BOD
and SS have been considered. This may not be adequate for
some wastewater agencies where dissolved solids, chemical
oxygen demand, nutrients or other parameters exceed minimum
acceptable levels and can be included as rate factors in the
user charge schedule.
Several objectives are to be realized through this selection
procedure and analysis.
1. A comparative analysis of the form, derivation,
application and administration of the present user charges
and the model user charges contained in the EPA guidelines.
2. Determine the degree of compliance with EPA
guidelines with regard to user charges.
3. Ascertain the number, SIC classification, flows and
loadings of all industrial users presently connected to the
respective wastewater systems.
M-. Ascertain the relative effect and desirability of
applying user charges to user classes versus individual users
21
-------
5. Based on the foregoing, determine the legal,
administrative, financial and physical provisions necessary
to achieve conformance with the EPA guidelines with
respect to user charges.
Of the 29 agencies sampled, only three other than Denver
were found to charge existing industrial users on the basis
of volume, flow and loading. These are: North Washington
Street Water and Sanitation District, North Table Mountain
Water and Sanitation District, and Crestview Sanitation
District. However, Crestview has only one industry currently
and, since the City of Arvada is currently in the process
of surveying and classifying industrial users with the
intent of instituting user charges, it was decided that
North Washington, North Table Mountain and Arvada would
provide quite distinctive and different approaches to
procedures and situations. Therefore, the methods,
application and rates charged by these three agencies were
analyzed in some detail related to the requirements of the
EPA user charge guidelines.
Effluent Parameters
The term "normal domestic sewage" is vague and no specific
guidelines are established for appropriate or representative
levels of flow, BOD or SS which are "normal" for each
residential tap. In fact, these levels vary from area to
area and district to district. Therefore, what is "normal"
for one instance may not be "normal" in another.
Table 4 was used to attempt to establish some average level
of flow for domestic sewage in the Denver area. Only
agencies included in this study and those with a high
proportion of residential taps were considered. Annual
flows per tap varied considerably between a low of 93,000
gallons annually to 274,000 gallons. Average annual flow for
the 9 agencies was 137,000 gallons. For study purposes,
a minimal annual domestic flow of 120,000 gallons annually
or 10,000 gallons per month was chosen. This corresponds
to the annual tap flows in the Applewood Sanitation District
which is completely residential.
Residential content in terms of biochemical oxygen demand
(BOD) and suspended solids (SS) seems to be another unknown
or variable quantity as it depends to a large degree on the
types and extent of use of home appliances such as washing
machines and garbage disposals. To determine the proportionate
contributions to systems requirements by other users, it
is necessary to estimate user loadings.
For 9 selected districts, the tons of BOD and SS were con-
verted to parts per million. Only study districts and
predominantly residential districts were chosen. Several
observations result from the data shown in Table 5. National
average values for BOD and SS levels usually range between 250
22
-------
Table 4
EFFLUENT FLOW PER TAP
Selected Sanitation Districts
1972
MUNICIPALITY OF DISTRICT
City of Arvada
City of Thornton
City of Westminster
Applewood S. D.
Crestview S. D.
North Table Mountain S. D.
North Washington Street, S. D.
Northwest Lakewood S. D.
Westridge S. D.
ANNUAL
FLOW
PER TAP
(Gallons)
116,000
132,000
139,000
120,000
93,000
173,000
274,000
181,000
149,000
PERCENT
RESIDENTIAL
97.5
97.1
96.4
100.0
95.0
98.8
90.7
97.7
99.1
WEIGHTED ANNUAL AVERAGE FLOW
137,000
SOURCE: Individual sanitation districts and MDSDD fl.
23
-------
Table 5
EFFLUENT CONTENT
Selected Sanitation Districts
1972
MUNICIPALITY
OR DISTRICT
City of Arvada
City of Thornton
City of Westminster
Applewood S. D.
Crestview W. & S. D.
North Table Mountain
W. & S. D.
North Washington Street
W. & S. D.
Northwest Lakewood
S. D.
Westridge S. D.
TONS
BOD
1,303
1,901
689
53
333
154
1,018
311
150
186
221
222
133
185
171
364
104
150
TONS
ns
1,651
2,543
844
72
351
302
818
314
197
PERCENT
ppm RESIDENTIAL
236
296
272
180
195
336
292
105
197
97.
97.
96.
100.
95.
98.
90.
97.
99.
5
1
4
0
0
8
7
7
1
Weighted Average
207
248
SOURCE: Metropolitan Denver Sewage Disposal District #1
-------
ppm and 300 ppm. However, BOD expressed in ppm in all but
one case are lower than these average values. BOD ppm in
all but one case are lower than SS ppm. The weighted averages
are distinctly different from average levels usually assumed
for households and are lower than those values assumed in
Federal guidelines.
Even though this analysis was intended to provide only general
average values, the variations and ranges are still considerable,
These could be caused by many factors, including: commercial
and industrial contribution of varying strengths; size,
character and type of domestic water uses; ground water
levels; construction and maintenance standards; each district's
own treatment facilities and practices; high infiltration;
storm sewers; high pure water use; and others.
Therefore, a range of BOD and SS levels was computed for
each of the three agencies under detailed analysis later
in this Section. Table 6 reflects an assumed BOD level
of 300 ppm and an SS level of 300 ppm. Table 7 assumes
levels of 230 ppm of BOD and 200 ppm of SS concentrations,
respectively, the same as used by the North Washington
Street District. Table 8 applies the same levels of BOD
and SS (210 ppm and 250 ppm) that were derived as the weighted
averages for selected agencies which were shown in Table 5.
In order to summarize these data. Table 9 was developed
to show the total tons of domestic content (BOD and SS)
based on the range of BOD levels from 210 ppm to 300 ppm
and the range of SS levels from 200 ppm to 300 ppm. It
can easily be seen that there can be quite a difference
depending on the level which is established for "normal
domestic sewage." For example, in North Washington
District, the selection of an average domestic level of
BOD at 210 ppm would understate the total domestic load on
the system by 251 tons over what the total residential
load would be based on an assumed level of 300 ppm. And
this 251 tons differential occurs with an annaul flow of
only 670 million gallons. For Arvada, with an annual flow
of 1,672 million gallons, the differential would increase
to 628 tons.
Therefore, assumed levels for flow* BOD content and SS
content in "normal domestic sewage" should be chosen
carefully, and analyzed and selected individually in each
agency jurisdiction. Other factors must also be considered,
such as infiltration, and the effect on the dilution of BOD
and SS concentrations because of the increased flow. This
consideration and its potential effects on the equitable
user charge program, will be discussed in more detail in
conjunction with the North Table Mountain analysis.
User Charges - North Washington Street Water and Sanitation
District
North Washington Street Water and Sanitation District is
located north of the City of Denver near the MDSDD #1
25
-------
Table 6
CALCULATION OF BASE DOMESTIC FLOW,
BIOCHEMICAL OXYGEN DEMAND
AND SUSPENDED SOLIDS
Selected Municipalities and Sanitation Districts
1972
Given:
1. Biochemical oxygen demand (BOD) concentration per
domestic user is 300 parts per million
2. Suspended solids (SS) concentration per domestic
user is 300 parts per million.
FORMULA TO CONVERT PARTS PER MILLION TO TONS
Tons = Concentration in parts per million x 8.345 pounds
per million gallons x total annual flow (mg) Z. 2,000
pounds per ton.
For North Washington Street Water and Sanitation District -
1972
Annual Flow = 670 million gallons
Annual Tonnage BOD = 838
Annual Tonnage SS = 838
For North Table Mountain Water and Sanitation District - 1972
Annual Flow = 210 million gallons
Annual Tonnage BOD = 263
Annual Tonnage SS = 263
For the City of Arvada
Annual Flow = 1,672 million gallons
Annual Tonnage BOD = 2,092
Annual Tonnage SS = 2,092
SOURCE: Flow data from Metropolitan Denver Sewage Disposal
District .#1. BOD and SS levels estimated by Wilbur
Smith and Associates.
26
-------
Table 7
CALCULATION OF BASE DOMESTIC FLOW,
BIOCHEMICAL OXYGEN DEMAND
AND SUSPENDED SOLIDS
Selected Municipalities and Sanitation Districts
1972
Biochemical oxygen demand (BOD) concentration per
domestic user is 230 parts per million (ppm)
2. Suspended solids (SS) concentration per domestic
user is 200 parts per million (ppm)
FORMULA TO CONVERT PARTS PER MILLION TO TONS
Tons = concentration ppm X 8.345 pounds per million gallons
X total annual flow(mg) 1 2,000 pounds per ton.
For North Washington Street Water and Sanitation District - 1972
Annual flow = 670 million gallons
Annual tonnage BOD = 643
Annual tonnage SS = 559
For North Table Mountain Water and Sanitation District - 1972
Annual flow = 210 million gallons
Annual tonnage BOD = 201
Annual tonnage SS = 175
For the City of Arvada - 1972
Annual flow = 1,672 million gallons
Annual tonnage BOD = 1,604
Annual tonnage SS = 1,394
SOURCE:Flow data from Metropolitan Denver Sewage Disposal District #1,
BOD and SS levels are those used for calculating industrial
charges by the North Washington Street Water and Sanitation
District.
27
-------
Table 8
CALCULATION OF BASE DOMESTIC FLOW,
BIOCHEMICAL OXYGEN DEMAND
AND SUSPENDED SOLIDS
Given;
1. Biochemical oxygen demand (BOD) concentration per domestic
user is 210 parts per million (ppm)
2. Suspended solids (SS) concentration per domestic user is
250 parts per million (ppm)
FORMULA TO CONVERT PARTS PER MILLION TO TONS
Tons = concentration (ppm) X 8.345 pounds per million gallons
X total annual flow (mg) ^ 2,000 pounds per ton.
for North Washington Street Water and Sanitation District - 1972
Annual flow = 670 million gallons
Annual tonnage BOD = 587
Annual tonnage SS = 698
for North Table Mountain Water and Sanitation District - 1972
Annual flow = 210 million gallons
Annual tonnage BOD = 184
Annual tonnage SS = 219
for the City of Arvada - 1972
Annual flow = 1,672 million gallons
Annual tonnage BOD = 1,464
Annual tonnage SS = 1,743
SOURCE: Flow data from Metropolitan Denver Sewage Disposal District #1.
BOD and SS units estimated by Wilbur Smith and Associates.
28
-------
Table 9
COMPARISON OF TONS OF DOMESTIC CONTENT LEVEL
Study Municipalities and Sanitation Districts
1972
MUNICIPALITY OR
DISTRICT
CONTENT (Parts Per Million)
BOD~~
300 230 210 WO 200" 250"
North Washington
Street Water and
Sanitation District
838 643 587 838 643 698
North Table Mountain
Water and Sanitation
District
263 201 184 263 175 219
City of Arvada
2092 1604 1464 2092 1394 1743
SOURCE: Base data from Metropolitan Denver Sewage Disposal District
Calculated by Wilbur Smith and Associates.
29
-------
treatment plant. As a combined water and sanitation
district, NWSWSSD in 1972 handled the distribution of
700 mg. of water and the collection and partial treatment
of 670 mg. of sewage containing 1,357 tons of BOD and
1,091 tons of SS. Sewerage system users totalled 2445, with
2217 classed as residential, 204 classed as commercial, and
24 classed as industrial.
The district owns, operates and maintains a primary
wastewater treatment facility which handles approximately
one-half of the average daily flow and has a capacity
of one million gallons per day. Primary treatment in this
facility removes about 50 percent of the BOD and SS content
of the plant influent. The remaining untreated sewage
plus the effluent from the primary treatment plant are sent
directly to the MDSDD #1 treatment facility.
Because North Washington Street is a combined water and
sanitation district, its accounts and operating statements
are often combined. In order to separate wastewater system
costs from those of the water system, the district admin-
istration was asked to allocate the various annual cost
items for the year 1972 attributable to the wastewater system.
These costs were then further allocated according to functions
such as administration, operations and maintanance, treatment
and disposal, and annual fixed capital costs. Identification
by function allowed a further allocation of costs either
directly to users or indirectly dependent on flow, BOD
or SS loading.
As shown in Table 10, total costs allocated to the waste-
water system were $193,940 in 1972. Treatment and disposal
was the major expense item, accounting for 76.6 percent
of the total. The largest single expense was the sewer
service fees charged by MDSDD #1, which amounted to
$131,422 or 67.8 percent of the total. By function, the
largest element was treatment and disposal while the lowest
functional expense was operations and maintenance at
$10,759 in 1972. Using these data as a base, it was
possible to develop unit costs.
Tables 11 and 12 present the unit costs for the following
categories: administrative expense per user, costs per 1000
gallons of flow, cost per ton of BOD and cost per ton of
SS. Based on municipal utility operating experience and
generally accepted accounting practices, the administrative
expense was allocated to each user on the assumption that
administrative costs per user were roughly equal.
Operations and maintanance cost was assigned totally to
flow, indicating that these expenses are responsive to system
utilization. Treatment and disposal expense and fixed
capital requirements were allocated according to flow,
BOD and SS. In this respect, Tables 11 and 12 differ.
30
-------
Table 10
SEWAGE COSTS BY FUNCTION
NORTH WASHINGTON STREET WATER AND SANITATION DISTRICT
Year Ended November 30, 1972
FUNCTION
Operations
COST CATEGORY
Repairs and Maintenance
Sewer Service Fees
Utilities and Power
Salaries and Administration
Accounting and Auditing Fees
Burglar and Fire Protection
Directors Fees
Employees Hositalization Insurance
Engineering Expense
Insurance
Legal-Attorney's Fees
Legal-Advertising, Recording and
Printing
Employees Retirement Fund
Miscellaneous Expense
Office Supplies and Expense
Postage
Supplies-Plant
Payroll Taxes
Telephone and Telemetering
Tests and Analysis
Truck Expense
Fixed Capital
SOURCE: Financial Statements and Accountant's Report, North Washington Street Water and Sanitation
Bistrict, AdamsCounty, November JU, iy72 .
Percent allocations provided by North Washington Street personnel
Administration
$ 250
TT ******
3,871
2,550
614
1,000
; 190
1,162
264
1,464
857
116
202
173
197
140
$13,050
Operations and
Maintenance
$ 4,962
4,000
197
120
848
204
428
$10,759
Treatment
and Disposal
$131,422
4,233
8,544
420
1,000
256
185
435
2,041
$148,536
Fixed
Capital Total
$ 4,962
131,422
4,483
16,415
2,550
614
1,000
807
1,162
1,264
1,464
857
492
848
202
173
185
836
140
2,041
428
$21,595 21,595
$21,595 $193,940
-------
Table 11
CALCULATION OF TOTAL AND UNIT USER CHARGES
BY FUNCTION
(based on MDSDD #1 Allocation formula)
NORTH WASHINGTON STREET WATER AND SANITATION DISTRICT
1972
1. ADMINISTRATIVE EXPENSES (Spread evenly among users)
Administration expense = $13,050
Total number of users = 2,445
2. OPERATIONS AND MAINTENANCE EXPENSE (Per unit flow)
Total operations and maintenance expense = 10,759
Total annual flow (Millions of gallons, 1972) = 670
3. TREATMENT and DISPOSAL EXPENSE (Flow, BOD, SS)
Total treatment and disposal expense = 148,540
Allocation of expense:
Flow = 45.5% = 67,580
Biochemical oxygen demand =30.9% = 45,900
Suspended solids =23.6% = 35,060
(SOURCE: MDSDD
4. FIXED CAPITAL (FDow, BOD, SS)
Total annual fixed capital expense $21,600
Allocation of expense:
Flow = 45.5% = 9,830
Biochemical oxygen demand =30.9% = 6,670
Suspended solids = 23.6% = 5,100
CSOURCE: MDSDD #1)
5. TOTAL UNIT COSTS PER USER AND PER UNIT FLOW, BOD AND SS
Administration Unit Costs Cper user)
Administration 5.34
Flow .u.nit_co.sts jper 1,000 gallonsj,
Administration
Operations and Maintenance
Treatment and Disposal
Fixed Capital
Total per 1,000 gallons
Biochemical oxygen demand (BOD) unit costs (per ton)
Administration 0.000
Operations and Maintenance 0.000
Treatment and Disposal 33.825
Fixed Capital 4.915
Total per ton $38.740
Suspended solids (SS) unit costs, (per ton)
Administration 0.000
Operations and Maintenance 0.000
Treatment and Disposal 32.136
Fixed Capital 4.675
Total per ton $36.811
SOURCE : Cost data estimated by Wilbur Smith and Associates from
Financial Statements and Accountants Report, North Washington
Street Water and Sanitation District, Adams County, November
30, 1972.
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Table 12
CALCULATION OF TOTAL AND UNIT USER CHARGES
BY FUNCTION
(Based on WSA Allocation Formula)
NORTH WASHINGTON STREET WATER AND SANITATION DISTRICT
1972
1. ADMINISTRATIVE_EXPENSES (Spread evenly among users)
Administration expense - * 10 nen
m ,-,-,,- -? lo.uou
Total number of users = 2 445
2. OPERATIONS AND MAINTENANCE EXPENSE (Per unit of flow)
Total operations and maintenance expense = $ 10 759
Total annual flow (millions of gallons) '570
3. TREATMENT AND DISPOSAL EXPENSE (flow, BOD, SS)
Total treatment and disposal expense = $148,540
Allocation of expense:
Flow _ = 30% = $ 44,560
Biochemical oxygen demand = 40% 59,420
Suspended solids = 30% 44'560
(SOURCE: WSSA) HH,ODU
4. FIXED CAPITAL (flow, BOD, SS)
Total fixed capital expense = $ 21,600
Allocation of expense:
F!°W = ^5.5% $ 9,830
Biochemical oxygen demand =30.9% 6 620
Suspended solids =23.6% = 5'inn
(SOURCE: MDSDD #1) '
5. TOTAL UNIT COST PER USER AND PER UNIT FLOW, BOD AND SS
Administration unit cost (per user)
Administration 5.34
Flow Unit ^costs (per 1,000 gallons)
Administration $ 0.000
Operations and Maintenance 0.016
Treatment and Disposal 0.067
Fixed Capital 0.010
Total per 1,000 gallons $ 0.093
Biochemical Oxygen demand (BOD) unit costs (per ton)
Administration 0.000
Operations and Maintenance 0.000
Treatment and Disposal 43.788
Fixed Capital 4.915
Total per ton $ 48.703
Suspended solids (SS) unit costs (per ton)
Administration$ 0.000
Operations and Maintenance 0.000
Treatment and Disposal 40.843
Fixed Capital
Total per ton
SOURCE: Cost data estimated by Wilbur Smith and Associates from Financial
Statements and Accountants' Report, North Washington Street
Water and Sanitation District, Adams County November 30, 1972.
33
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Table 11 assumes the same allocation percentages used by
MDSDD #1, a regional treatment and disposal agency, while
Table 12 assumes a distribution which, although arbitrary,
has been found by various studies of local agencies to
represent typical cost distribution.^' Accordingly,
Tables 11 and 12 differ in that a higher percentage of
costs are allocated to BOD and SS than to flow in Table 12.
Although North Washington Street Water and Sanitation
District has 24- "industries," a variety of methods are
employed to determine user charges. Some industrial users
are charged on the basis of the number of facilities such
as water taps, washroom facilities and drains. Some
industrial users pay on the basis of volume of water use while
others pay on the basis of negotiated contract. Four
industries are charged on the basis of the type, quantity
and content of discharge. Because industrial waste
characteristics can vary so greatly between industries,
these 4 industries for which detailed flow, BOD and SS
records were available were used in the analysis of user
charges for industry. The industries and their SIC
classification are given below:
Industry Name Product SIC Classification
Wilhelm Foods Food Processing 2033
Continental Baking Bakery 2051
National By-Products Meat by-products 2077
Chapparell Industries Snowmobiles 3799
Tables 13 and 14 show the charges which these industries
would pay according to the functional cost breakdown under
the two cost distributions and the charges actually levied
by NWSWSSD. Table 13 uses the MDSDD #1 allocation. The
results indicate that the industries are possibly being
undercharged a total of $1,730 or 3.0 percent. Table 14,
using the cost allocations which place a higher burden on
content than flow, indicate that these industries may have
underpaid in 1972 by a total of $5,744 or 10.1 percent.
Charges to these industries are calculated by NWSWSSD
according to a formula. The calculation card used by
NWSW&SD is shown in Figure 2. Since this formula apparently
underestimates the actual costs, an analysis of the formula
was conducted to determine what changes might be made to
bring it more in line with actual costs.
A feature of the industrial charge formula is that each
1000 gallons of flow with a maximum content of 230 ppm
of BOD and 200 ppm of SS is charged at a rate of $.18.
Each ppm of BOD in excess of 230 ppm is charged $.00018
and each ppm of SS in excess of 200 ppm is charged at
$.00016. Table 15 shows the derivation of the initial
flow charge under the two cost allocation assumptions.
Interestingly, the calculated charge using the MDSDD #1
cost allocation should be $.200 while under the Table 14
34
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Table 13
CALCULATED AND ACTUAL CHARGES FOR MEASURED INDUSTRIES
USING MDSDD#1 ALLOCATION
North Washington Street Water and Sanitation District
1972
TYPE OF
CHARGE QUANTITY
Administration ^
Flow (mg.) 157.19
Biochemical Oxygen
Demand (Tons) 493.06
Suspended Solids
(Tons) 510.56
Total Calculated Charge
Actual Charge by NWSW&SD
Deficit
RATE
$ 5.34
132.00
38.74
36.81
AMOUNT
$ 21
20,749
19,101
18,794
$58,665
$56,935
$ 1,730
SOURCE: Flow and content data from North Washington Street Water and
Sanitation District. Applicable rate calculated by Wilbur
Smith and Assoicates based on percentage charge allocation
used by MDSDD#1 as follows: Flow = 45.5 percent, BOD = 30.9
percent and SS = 23.6 percent of treatment and disposal and
fixed capital expense.
35
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Table 14
CALCULATED AND ACTUAL CHARGES FOR
MEASURED INDUSTRIES USING WSSA ALLOCATION
North Washington Street Water and Sanitation District
1972
Type of
Charge Quantity
Administration 4
Flow (mg) 157.19
Biochemical Oxygen
Demand (Tons) 493.06
Suspended Solids
(Tons) 510.56
Total Calculated Charge
Actual Charge by NWSW & SD
Deficit
Rate
$5.34
98.00
50.16
47.11
Amount
$21
15,405
24,012
23,241
$62,679
$56,935
$ 5,744
SOURCE: Flow and content data from North Washington Street Water and
Sanitation District. Applicable rate calculated by Wilbur
Smith and Associates based on percentage charge allocation
estimated by WSSA as follows: Flow = 30 percent,
BOD = 40 percent and SS= 30 percent of treatment and
disposal and the MDSDD #1 allocation of fixed capital
expense of Flow = 45.4%, BOD = 30.9%, SS = 23.6%.
36
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INDUSTRIAL RATE CALCULATION FOR:
MONTH WASTE
YEAR _AVG. BOD
BOD FACTOR.
S. S. FACTOR
TOTAL BILL.
(1,000 Gallons)
AVG. S. S.
-230 X .001 =
-200 X .0009 =
FLOW FACTOR
TOTAL FACTOR
X $ .18 X
(Factor)
_GALS.
_M/L
M/L
1.00
NORTH WASHINGTON STREET
WATER AND SANITATION DISTRICT
INDUSTRIAL RATE CALCULATION FORMULA
Figure 2
37
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Table 15
APPLICABLE CHARGE PER 1000 GALLONS FLOW
WITH BASE EFFLUENT CONTENT
North Washington Street Water and Sanitation District
1972
GIVEN:
Flow = 1,000 gallons
BOD* = 230 ppm or .000959 Tons
SS = 200 ppm or .000834 Tons
Cost per 1,000 gallons based on MDSDDtl expense allocation:
Flow = $0.132
BOD = 0.037
SS = 0.031
Total = $0.200 per 1,000 gallons
Cost per 1,000 gallons based on WS&A and MDSDD #1 Expense Allocation
Flow = $0.098
BOD = 0.047
SS = 0.038
Total = $0.183 per 1,000 gallons
NOTES: MDSDD#1 Expense allocation as follows:
Flow = 45.5 percent, BOD = 30.9 percent and
SS = 23.6 percent of total treatment and disposal
and fixed capital expense. WS&A expense allocation
as follows: flow = 30 percent, BOD = 40 percent and
SS = 30 percent.
* Factors derived:
ppm x 8.345 -f 2000 ~ 1000 = tons/1000 gallons
38
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allocation the charges should be $.183, the amount currently
charged. Using the Table 14 cost allocations., it can
be calculated that the cost of operations and maintenance
with regard to 1 ppm of BOD per 1000 gallons of flow
is $.000204 and 1 ppm of SS is $.000190. Accordingly, the
rate charged per part per million of BOD in excess of
230 ppm should be adjusted upward by 113 percent and the
rate for SS^in excess of 200 ppm should be adjusted by 119
percent. With these changes, the "current formula would
have recovered total applicable costs in 1972.
Since actual costs can only be determined at the end of the
year, the formula must be adjusted either on the basis
of budgeted costs or on the basis of the previous year's
costs. Neither of these methods assures recovery in any
given year. Thus, attention could be given to means of
guaranteed recovery such as some method of backcharge.
A further stipulation of the Federal Guidelines was that each
agency "... will adopt a system of charges to assure that
each recipient of waste treatment services will pay its
proportionate share of the costs..." In the previous
section, only 4 of the industries in the NWSWSSD have been
considered. This was because measurement of flow, volume
and loading had been conducted for these allowing a direct
comparison of actual cost and revenue. Unfortunately,
this is not true of the residential, commercial and the
other industrial users. Nevertheless, an analysis in
general terms of these users can be made.
Accordingly,'a residential or base domestic loading for
North Washington Street Water and Sanitation District of
230 ppm of BOD and 200 ppm of SS was chosen. This level is
consistent with the base levels assumed in the industrial
formula and seems to be about average when compared with base
level content assumed in other areas. ^'
Table 16 shows the flow and BOD and SS loading for the three
distinguishable classes of users in the NWSWSSD. From these
data it is possible to estimate the user cost responsibility
of each group and then to compare that cost responsibility
with the actual fees charged by the district.
Total annual charges or cost responsibility of each type of
user are shown in Table 17 and are based on the cost
allocation distribution developed by Wilbur Smith and
Associates. In total, wastewater system users were under-
charged by 61.2 percent; however, the variation among
users was significant. Residential users who are charged
$1.00 per month were undercharged by 114.4 percent. This
indicates that residential users should be paying on a
flat rate about $2.30 per month or $27.60 annually. Those
39
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Table 16
ESTIMATED FLOW AND LOADINGS BY ALL USERS
North Washington Street Water and Sanitation District
1972
CONTENT
TYPE OF USER Flow BOD SS
(mg) (tons) (tons)
Residential 266 255 221
Measured Industrial 157 493 511
Others (non-measured
industrial and
commercial) 247 609 359
TOTAL 670 1357 1091
SOURCE: Residential based on 2217 users, BOD of 230 ppm and SS
of 200 ppm and flow of 120,000 gpy. Measured industrial
see Table 1^- Others are the remaining amounts.
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Table 17
ESTIMATED AND ACTUAL CHARGES BY ALL USERS
North Washington Street Water and Sanitation District
1972
TYPE OF USER
Residential
Measured Industrial
Others (non-measured
industrial and
commercial
TOTAL
ESTIMATED
CHARGE
$60,500
62,679
70,761
$193,940
ACTUAL
CHARGE
$28,222
56,935
35,148
$120,305
DIFFERENCE
Number
$32,278
S,744
35,613
$73 ,635
Per Cent
114.4
10.1
101.3
61.2
SOURCE: Residential estimated charge based on Flow = 266 mg at a
processing cost of $.183 per 1000 gallons and a per user
administrative charge of $5.33 per year.
Measured industrial from Table 14.
Others estimated charge based on revised industrial cost
recovery formula
41
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industrial users whose flow, volume and loading are measured
are most nearly carrying their share with an 10.1 percent
underpayment. Necessary adjustments to the charge formula
have already been discussed. Remaining users, which include
non-measured industrial users and commercial users, are
paying about one-half their share with 101.3 percent under-
payment. User charges can be estimated for these users
based on estimated and assumed levels of flow and content
applicable to the user class category.
Finally, with regard to user charges in the North Washington
Street Water and Sanitation District, two important
observations can be made in addition to those already
cited. Because NWSWSSD is a combined water and sanitation
district, the various accounts are not separated but are
combined thus not allowing an accurate cost accounting
of actual expenses attributable to the two functions.
Although the"district did operate at a net loss ($10,708
before depreciation in 1972) it is apparent that water
users through their fee structure are, in effect, subsidizing
the wastewater system operations. Therefore, it could be
concluded that the North Washington Street Water and
Sanitation District is not currently in compliance with the
Federal Guidelines with regard to user charges although
it could be considered in substantive compliance in terms
of those industries for which flow, volume and loading
information are available.
User Charges - North Table Mountain Water and Sanitation
District
The North Table Mountain Water and Sanitation District is
located west of the city of Denver, near Golden. The
North Table Mountain District (NTMD) provides no treatment
facilities for sewage originating within the district, all
wastewater collected being transmitted direct to the
Metropolitan Denver Sewage Disposal District #1 (MDSDD #1)
facilities. In 1972, the NTMD had an average total of
480 users, 467(6' of which were residential, 10 were
classed commercial and 3 were classed as industrial.
In 1972, the district, according to MDSDD #1 statistics,
NTMD transmitted 210 million gallons of sewage, which contained
154 tons of biochemical oxygen demand (BOD) and 302
tons of suspended solids (SS).
As a combined water and sanitation district, financial
accounts and operating statements are commingled. Because
of the difficulty of identifying and separating wastewater
system costs from those of the water system, the NTMD
administration was requested to allocate the various operating
expense items for the year 1972 to the wastewater system.
These costs were then further allocated according to functions,
such as administration, operations and maintenance, treat-
ment and disposal, and annual fixed capital costs. This
identification by function permitted an allocation of cost
42
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either directly to users or indirectly, dependent on flow,
BOD or SS loading.
As shown in Table 18, the total costs allocated to the
operations of the wastewater system were $49,550 in 1972.
During that period, there were no fixed capital expenditures
to be financed through user charges. The largest category
of expense was treatment and disposal, representing
$35,861 or 72.4%. The largest single item within this
category was the service fees charged by MDSDD #1,
totalling $34,744. Operations and maintenance and admin-
istrative expenses were relatively small portions of the
total, accounting for only 10.5% and 17.1% respectively.
Utilizing this particular expense breakdown, it was then
possible to develop unit costs. Tables 19 and 20 present
the unit costs of the following categories: administrative
expenses per user, costs per thousand gallons of flow, cost
per ton of BOD and cost per ton of SS. Based on municipal
utility operating experience and generally accepted accounting
practices, the administrative expense was spread among all
users on the assumption that administrative costs per user
were roughly equal. This resulted in an administrative
cost per user of $17.68 per year. Operations and
maintenance cost was assigned totally to flow, indicating
that these expenses are responsive to system utilization.
Based on an operations and maintenance expense of $5,203
and a total annual flow of 210 million gallons, it was
determined that the 0 S M expense per 1000 gallons was
about $.025.
Treatment and disposal expense and fixed capital requirements
were allocated according to flow, BOD and SS. It is in this
regard that Table 19 and 20 differ. Table 19 assumes the
same allocation percentages used by MDSDD #1 for both cate-
gories, while Table 20 assumes a distribution of treatment
and disposal expenses which although arbitrary, has been
found to represent typical cost distribution.^'' in Table
20, however, the MDSDD #1 allocation of expenses for fixed
capital was retained. Primarily, these two tables differ
in that a higher percentage of costs are allocated to BOD
and SS in Table 20, as opposed to the somewhat higher
cost allocation to flow which is reflected in Table 19.
From the data which were analyzed, and from discussions with
North Table Mountain District personnel, it was obvious that
one problem which would present difficulties in the com-
putation of equitable user ratios for all system users
was the high incidence of infiltration evident in this
district. Estimates of the volume of infiltration ranged
from 40% to as high as 60% of the total flow. In fact, in
the final adjustments by MDSDD #1 of 1972 loadings and annual
charges, the measured flow of 210 gallons from NTMD was many
43
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Table 18
SEWAGE COSTS BY FUNCTION
North Table Mountain Water and Sanitation District
Year Ended November 30, 1972
FUNCTION
Operations Treatment
Adminis- and and Fixed
Cost Category trative Maintenance Disposal Capital Total
Salaries $1,999 $1,999
Engineering-Sewer 2,029 $2,028 4,057
Sewer Maintenance 2,186 2,186
Sewer Charges $34,744 34,744
Metro Denver
Power - Water 134 134
Telemetering 77 77
Service
Automotive
Costs 218 218
Tools 771 771
Analysis, Sewage - 906 906
industries
Audit Fee 180 180
Directors Fees 1,650 1,650
Election Expense 262 262
County Treasurers 543 543
Fee
Legal Fees 770 770
Insurance and 153 153
Bonds
Dues 56 56
Printing g Misc. 237 237
Office rent 212 212
Office Supplies 196 196
Payroll Taxes 104 104
Telephone 95 95
Bond Principal
and Interest
Capital Expen-
ditures
$8,486 $5,203 $35,861 -0- $49,550
Source: Financial Statement and Accountant's Report, North Table
Mountain Water and Sanitation District, Jefferson County,
November 30, 1972 (Kennedy and Lesan, CPA)
Percent allocations to sewer operation provided by
North Table Mountain personnel.
44
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Table 19
TOTAL AND UNIT USER CHARGES
BY FUNCTION
(Based on MDSDD #1 Allocation Formula)
North Table Mountain Water and Sanitation District
1972
1. ADMINISTRATIVE EXPENSES (spread evenly among users)
Administration expense = $8,4-86
Total number of users 48.0
2. OPERATIONS AND MAINTENANCE EXPENSE (per unit flow)
Total operations and maintenance expense $5,203
Total annual flow (million of gallons, 1972) 210
3. TREATMENT AND DISPOSAL EXPENSE (Flow, BOD and SS)
Total treatment and disposal expense $35,861
Allocation of Expense:
Flow = 45.5%
Biochemical oxygen demand = 30.9%
Suspended solids = 23.6%
4. FIXED CAPITAL (Flow, BOD and SS) -0-
Total annual fixed capital expense
Allocation of expense:
Flow = 45.5%
Biochemical oxygen demand =30.9%
Suspended solids = 23.6%
(SOURCE: MDSDD #1)
5. TOTAL UNIT COSTS PER USER AND PER UNIT FLOW, BOD AND SS
Administration Unit costs (per user) $17.68 "
Flow unit costs (per 1000 gallons)
Administration $ 0.000
Operations and Maintenance 0.025
Treatment and Disposal 0.078
Fixed Capital 0.000
TOTAL per 1000 gallons $ 0.103
Biochemical oxygen demand (BOD) unit costs (per ton)
Administration $ 0.000
Operations and Maintenance 0.000
Treatment and Disposal 71.955
Fixed Capital 0.000
TOTAL per ton $71.955
Suspended Solids (SS) unit costs (per ton)
Administration $ 0.000
Operations and Maintenance 0.000
Treatment and Disposal 28.023
Fixed Capital 0.000
TOTAL per ton $28.023
Source: Cost data estimated by Wilbur Smith and Associates from
Financial Statement and Accountant's Report, North Table Mountain
Water and Sanitation District, Jefferson County, November 30, 1972
(.Kennedy and Lesan, CPA) 145
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Table 20
TOTAL AND UNIT USER CHARGES
BY FUNCTION
(Based on WS&A Allocation Formula)
North Table Mountain Water and Sanitation District
1972
1. ADMINISTRATIVE EXPENSES (spread evenly among users)
Administration expense $8,486
Total number of users 480
2. OPERATIONS AND MAINTENANCE EXPENSE (per unit flow)
Total operations and maintenance expense $5,203
Total annual flow (millions of gallons, 1972) 210
3. TREATMENT AND DISPOSAL EXPENSE (Flow, BOD and SS)
Total treatment and disposal expense $35,861
Allocation of Expense:
Flow ' = 30.0% 10,758
Biochemical oxygen demand = 40.0% 14,345
Suspended Solids = 30.0% 10,758
(SOURCE: WS&A)
4. FIXED CAPITAL (Flow, BOD, and SS)
Total annual fixed capital expense -0-
Allocation of expense:
Flow = 45.5%
Biochemical oxygen demand =30.9%
Suspended Solids = 23.6%
(SOURCE: MDSDD #1)
5. TOTAL UNIT COSTS PER USER AND PER UNIT FLOW, BOD AND SS
AdministrationJJnit Costs (per user) $17.68
Flow Unit Costs (per 1000 gallons)
~"Administrat ion $ 0.000
Operations and Maintenance 0.025
Treatment and Disposal 0.051
Fixed Capital 0.000
TOTAL per 1000 gallons $ 0.076
Biochemical Oxygen Demand (BOD) unit cost (per ton)
Administration $ 0.000
Operations and Maintenance 0.000
Treatment- and Disposal 93.149
Fixed Capital 0.000
TOTAL per ton $93.14.9
Suspended'Solids (SS) unit costs (per ton)
~~""Administration$ 0.000
Operations"and Maintenance 0.000
Treatment and Disposal 35.623
Fixed Capital O.QQQ
TOTAL per ton $35.623
Source- Cost data estimated by Wilbur Smith and Associates from
Financial Statement and Accountant's Report, North Table
Mountain Water and Sanitation District, Jefferson County
November 30, 1972 (Kennedy and Lesan, CPA)
-------
times greater than the originally estimated 54 million
gallons. These differences in calculation and estimates
of flow from that which was recorded by MDSDD #1
are probably a function of several factors, but it is
obvious that infiltration is a major factor.
The high degree of infiltration further complicates the
analysis of system loadings since, in effect, it may dilute
or increase the BOD and SS levels which are measured.
Therefore, it is probable that the total actual tons of BOD
and SS attributable to users were different than those
reported by MDSDD #1, and calculating the proportionate
loadings of all residential users and measured industries
within the district is thus subject to error.
Table 21 reflects the estimated flow and loadings for
three classes of users based on the average parameters.
It can be seen that the estimated flow which is unaccounted
for (infiltration, etc.) represents 127 million gallons.
Since it is impossible to pinpoint this quantity and its
source and because the exact effect on the BOD and SS
levels cannot be determined, it becomes necessary to
allocate the MDSDD #1 measured volumes to these user classes.
Table 22 shows the percentage share of each user class to
the estimated volumes derived in Table 21. Residential
users, based on average parameters, would account for 67.5%
of the flow, 53.7% of the BOD content and 16.5% of the SS
content. Industrial users (their volumes based on actual
samples) would account for 30.1% of the flow, 44.4% of the
BOD content, and 82.9% of the SS content. Commercial
users account for the balance.
Taking these percentage shares of total system demand for
each user class, it was possible to apportion the MDSDD #1
measured quantities. Table 23 reflects these allocations.
Flow and BOD levels are increased in every case while SS
levels are decreased to arrive back at the control totals.
These are the flows and loadings for each class which
were used in allocating costs and determining the order
of magnitude of equitable user charges.
During 1972, three industries within North Table Mountain
District were measured periodically to determine their
respective load upon the system. Detailed records of the
flow, BOD and SS were maintained and were available to be
used in this analysis of user charges for industries. The
industries involved and their SIC classification are given
below.
Industry Product SIC Classification
Jeffco Manufacturing Steel and Aluminum cans 3411
Boise-Cascade Corrugated containers 2651
Hazen Research Chemicals 2819
47
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Table 21
ESTIMATED FLOW AND LOADINGS BY ALL USERS
North Table Mountain Water and Sanitation District
1972
TYPE OF USER
NUMBER
FLOW
me;
BOD
Tons
SS
Tons
Residential
Commercial and
Light Industrial
Measured Industrial
Sub Total
TOTAL (MDSDD #1)
467
56
58
58
10
3
480
_
2
25
83
210
2
48
108
154
2
291
351
302
unaccounted for
(infiltration, etc.)
127
(49)
Note: Residential based on 120,000 gallons per year with contents
of 250 ppm BOD and 250 ppm SS. Commercial based on 240,000
gallons per year with content of 250 ppm BOD and 250 ppm SS,
Industrial based on measured samples. The number of
residential sewer taps is 1972 average; 177 in January
increasing to 737 in December..
The "unaccounted for" quantities will obviously vary
depending on the Flow, BOD and SS assumptions per user.
48
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Table 22
USER SHARE OF SYSTEM LOAD
BASED ON ESTIMATED LOADINGS (Table 21)
North Table Mountain Water and Sanitation District
1972
Flow BOD SS
mg % Tons % Tons
Residential 56 67.5 58 53.7 58 16.5
Commercial and
Light Industrial 2 2.4 2 1.9 2 .6
Measured Industrial 2_5_ 30.1 4-8 44.4 291 82.9
TOTAL 83 108 351
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Table 23
ADJUSTED FLOW AND LOADINGS
BASED ON ESTIMATED SHARE ALLOCATION (Table 22)
North Table Mountain Water and Sanitation District
Flow BOD SS
mg Tons Tons
Residential 142 83 50
Commercial and
Light Industrial 53 2
Measured Industrial 63 68 250
MDSDD #1 TOTALS 210 154 302
SOURCE: Total from Metropolitan Denver Sewage Disposal District
No. 1.
Allocations to user class by Wilbur Smith and Associates
50
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Tables 24 and 25 show the estimated charges which these
industries would pay according to a functional cost breakdown
under the two cost distributions, described in Tables 19
and 20, as compared with the actual charges levied by North
Table Mountain District. Table 21 uses the MDSDD #1
allocation. The results indicate that the industries may
have been overcharged by a total of $7,820.67. Table 25
uses the cost allocation assumed by Wilbur Smith and
Associates for treatment and disposal and the MDSDD #1
allocation for fixed capital. Under this allocation, which
places a higher burden on content than on flow, the
indication is that the industries may have been overcharged by
a total of $6,180.75 in 1972.
The North Table Mountain District does not have an estab-
lished formula by which it charges industrial users based
on the loadings upon the system. Generally speaking, the
district charges each industry on a monthly rate, based
on 75% of the water usage. Then, at the end of each
year, when the precise total system loadings are determined
by MDSDD #1, a computation is made of the various contributors,
(residential, commercial and industrial) to the system, and
industries are back-charged an appropriate amount to cover
the costs of their respective loading upon the system.
In 1972, these three industries were charged a total of
$10,736.90, billed monthly, as a result of their water usage.
At the end of the year, through a formula calculation to
cover the total charges by MDSDD #1, it was determined
that these three industries should pay an additional
$15,244.99 as a back charge. This resulted in total
charges of $26,260.99 as shown as the actual charge by
the North Table Mountain District for these industries.
It would appear from these calculations that the primary
concern of the back-charge calculation was recovering the
cost charged by MDSDD #1 with a 33% - 36% override to
cover administration, operations and maintenance of the
system. It appears that industrial users are being required
to pay for all unaccounted for loads to the system (in-
filtration, etc.) rather than apportioning these to all
users.
In order to equitably distribute these effects to all
users, it was necessary to take the adjusted flow and
loadings for each class (from Table 23) and determine the
average annual flow per user and the applicable ppm ratio for
BOD and SS. Table 26 reflects the revised flow allocation,
raising the residential users from 120,000 gallons/year
to 304,000 gallons/year. Table 27 shows the new BOD and
SS levels based on this flow for both residential and
commercial-users. These relationships are down from
the original parameter of 250 ppm for each.
Based on these assigned allocations, it was then possible
51
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Table 24
CALCULATED AND ACTUAL CHARGES FOR
MEASURED INDUSTRIES USING MDSDD #1 ALLOCATION
North Table Mountain Water and Sanitation District
1972
TYPE OF CHARGE
Administration
Flow (mg)
(1)
QUANTITY
3
63
RATE
$17.68 '
$103.00
AMOUNT
$53.04
6489.00
Biochemical Oxygen
Demand (Tons)
68
71.96
4893.28
Suspended Solids
(Tons)
250
28.02
7005.00
TOTAL CALCULATED CHARGE
ACTUAL CHARGE BY NTMWSSD
Excess
$18,440.32
$26,260.99
$ 7,820.67
Based on 75% of water usage.
52
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Table 25
CALCULATED AND ACTUAL CHARGES FOR
MEASURED INDUSTRIES USING REVISED (WSA) ALLOCATION
North Table Mountain Water and Sanitation District
1972
TYPE OF CHARGE
Administrat ion
Flow (mg)
BOD (Tons)
SS (Tons)
REVISED
QUANTITY
3
63
68
250
RATE
$17
76
93
35
.68
.00
.15
.62
AMOUNT
$53
4788
6334
8905
.0,
.00
.20
.00
TOTAL CALCULATED CHARGE
ANNUAL CHARGE BY NTMWSSD
EXCESS
$20,080.24
$26,260.99
$ 6,180.75
53
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Table 26
ADJUSTED ANNUAL FLOW QUANTITIES BASED
ON ALLOCATED USAGE (TABLE 23)
North Table Mountain Water and Sanitation District
1972
FLOW GALLONS PER YEAR
TYPE USER NUMBER mg PER USER
Residential 467 142 304,000
Commercial 10 5 500,000
Industrial 3 63 21,000,000
Note: These were revised from previous estimates of 120,000
gallons/year for residential users, 240,000 gallons/year
for commercial users, and from industrial usage based on
75% of their water bill as shown in Table 21. These
revisions were based on the allocated quantities for
each class derived from MDSDD #1 totals shown in Table 23.
54
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Table 27
ADJUSTED BOD AND SS LEVELS
BASED ON ALLOCATED USAGE BY USER CLASS
North Table Mountain Water and Sanitation District
1972
BOD SS
ppm ppm
Residential 140 84
Commercial 144 96
Industrial 259 951
Note: Residential and Commercial BOD and SS levels were
originally estimated at 250 ppm (See Table 21).
Formula:
BOD or SS (ppm) x 8.345 x flow(mg) _ BQD QT ss (Tons)
2000
Note: These levels should not be construed as "normal
domestic sewage," but merely as adjustments
applicable only to conditions in North Table Mountain
Water and Sanitation District.
Allocations by Wilbur Smith and Associates
55
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to determine the applicable charge per 1000 gallons of
flow containing the revised base effluent content. The
revised base effluent content is defined in this case as
140 ppm BOD and 84 ppm SS for residential users, and 114
ppm BOD and 96 ppm SS for commercial users, as shown in
Table 27 (these should not be interpreted as "normal
domestic sewage" levels).
In Table 28, using the expense allocation of MDSDD #1,
expenses for the processing of 1000 gallons of sewage
at these levels are shown as 15.5£ for residential users
and 15.7C for commercial users. Based on the Wilbur
Smith and Associates calculated expense allocation, the
cost for processing the same 1000 gallons would be
14.2£, and 14. 6C respectively.
Based on the estimated costs per 1000 gallons of flow for
residential and commercial users derived from the alternate
cost allocation formula from Table 28, for residential
and commercial users, and using the user charge revenue
required from industries, as shown in Table 25, it was
possible to calculate the estimated charge per user class
to recover appropriate expenses.
Table 29 shows a summary of these calculations. It is
obvious that total revenues are extremely close to total
expenses based on the current method of charging. In fact,
the actual charges were closer to actual expenses by $119
than were the estimated charges.
However, the practice of charging residential customers
at $4.00 per month, and allocating all additional expenses
not covered by this revenue to industrial users at the end
of the year, results in an inequitable distribution of
cost burden.
Based on previous allocation methods, residential users
should be contributing $28,283, which is $5,875 more than
was charged to this class in 1972. This results in a
26.2% underpayment, while industry is shown to have been
overcharged by $6,181 or 23.4%. This proportionate
allocation of expense recovery would have required payment
of slightly over $60 per year per residential user, or
about $5.00 per month.
Finally, with regard to user charges in the North Table
Mountain Water and Sanitation District, several important
observations, in addition to those already cited, should
be made. As with the North Washington Street District, also
a combined water and sanitiation district, the various funds
and accounts are not separated, but are combined. This
does not permit accurate cost accounting or intelligent
allocation of expenses attributable to the wastewater
functions. Further, the calculation by the district of
56
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Table 28
APPLICABLE CHARGE PER 1,000 GALLONS FLOW
BASED ON ADJUSTED EFFLUENT CONTENT
AND REVISED FLOW ALLOCATIONS
North Table Mountain Water and Sanitation District
1972
Given:
Flow
BOD*
SS
1,000 gallons
residential - 140 ppm or .000584 tons/1000 gallons
commercial - 144 ppm or .000601 tons/1000 gallons
residential - 84 ppm or .000350 tons/1000 gallons
commercial - 96 ppm or .000401 tons/1000 gallons
Cost per 1000 gallons based on MDSDD #1 allocation:
Flow
BOD
SS
TOTAL
Residential
50.103
0.042
0.010
$0.155
Commercial
$0.103
0.043
0.011
$0.157
Cost per 1000 gallons based on Wilbur Smith and Associates allocation:
Residential
Flow
BOD
SS
TOTAL
$0.076
0.054
0.012
$0.142
Commercial
$1)7076
0.056
0.014
$0.146
* Factors derived: ppm x 8.345 4- 2000 4- 1000 = tons/1000 gallons.
Note: BOD and SS levels should not be interpreted as levels for
"normal domestic sewage." These factors evolved from
considerations of special circumstances in the NTMWSD
and are used only to apportion total costs to relative usage.
57
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Table 29
ESTIMATED AND ACTUAL CHARGES BY ALL USERS
North Table Mountain Water and Sanitation District
1972
ESTIMATED ACTUAL
TYPE USER NUMBER CHARGE CHARGE DIFFERENCE PERCENT
Residential 467 $28,283 $22,408 - $5,875 -26.2%
Commercial
and Light 10 $ 907 $ 720* - $ 187 -26.0%
Industrial
Measured
Industrial 3 $20,080 $26,261 * $6,181 +23.4%
TOTAL $49,270 $49,389 +$ 119 + .2%
ACTUAL EXPENSES $49,550 $49,550
DEFICIT $ 280 $ 161
Note: Residential based on a per user charge of $17.68 plus
a cost of $0.142 per 1000 gallons and an allocated usage
of 304,000 gallons per year.
Industrial from Table 25.
Commercial based on a per user charge of $17.68 plus
a cost of $0.146 per 1000 gallons and an allocated
usage cost of 500,000 gallons per year.
* Estimated; based on 75% of water bill.
58
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user charges for the various classes of users is not designed
for total cost recovery, but for recovery of only that
amount charged by MDSDD #1 plus a 33% factor for administra-
tion and operation. The aggregate user charges levied in
1972, including the back charges at the end of the year
to measured industrial users, appear to be adequate on the
surface to cover overall general administrative, operations
and maintenance, and treatment and disposal expenses as
defined by the district.
It could be concluded that the North Table Mountain Water
and Sanitation District is not currently in total compliance
with the Federal guidelines with regard to user charges.
It is obvious, however, that this district is consciously
attempting to levy user charges based on loadings to the
system, and is at least in compliance withthe intent of
EPA guidelines to apportion cost directly to users based
on their respective load on the system. The discrepancy
apparently lies principally within the accounting procedures
and the allocation of charges attributable to unaccounted-
for flow (e.g., infiltration etc.).
User Charges - City of Arvada - Wastewater Control Division
The City of Arvada is just beginning to initiate a program
of sampling and measuring the wastes from selected industries
as the basis for charging all users according to their load
on the system.
City of Arvada personnel have recently completed an extensive
analysis of all non-residential users of the wastewater system
and have begun to compile detailed information on the res-
pective function, type of product, and potential loading of
materials to the system.
In 1972, the City of Arvada had an estimated 15,607 sewer
taps. Of these, 15,218 were residential and 389 were
classified as commercial. The initial survey by the City
staff, which included an analysis of all 389 "commercial"
establishments, found that 17 of these firms should be
classified as "industrial" and further, that 4 of these
industries were currently contributing loads to the system
in excess of "normal domestic sewage." These four industries
are being placed on a sampling program and city personnel
are currently developing guidelines for "normal domestic
sewage" and user charge recovery from these industries,
based on their excessive loadings.
The City of Arvada owns, operates and maintains a
secondary wastewater treatment facility which handles
a portion of its total sewage demands. As shown in Table 30,
the Arvada treatment facilities handled about 330 million
gallons of sewage in 1973, which contained 335 tons of BOD
and 414 tons of SS. The major portion of Arvada's total
59
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Arvada Treat-
ment Facilities
Table 30
TOTAL FLOW AND LOADINGS
City of Arvada
1972
FLOW
(millions
of
gallons)
330.7
BOD
243
BOD
(tons)
335
SS
EH!
300
SS
(tons)
Direct to
MDSDD fl
1,672.0
187
1,303
237 1,651
total
2,002.7
196
1,638
247 2,065
Source: City of Arvada and MDSDD #1.
60
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wastewater volumes goes directly to MDSDD #1 for treatment.
The portion going to MDSDD #1 in 1972 amounted to 1,672 million
gallons of flow, with 1,303 tons of BOD and 1,651 tons of SS.
Therefore, Arvada's treatment facilities processed only
approximately 16.5% of the flow, 20.5% of the BOD and 20.0%
of the SS.
Table 31 reflects the total cost allocated to the operation
of the sewerage system within the City of Arvada. These costs
were broken down in the same manner as previously for North
Table Mountain and North Washington Street, showing admin-
istration, operations and maintenance, treatment and dis-
posal, and fixed capital. The total operating cost for the
entire system in 1972 was $444,968, of which 67.1% was
attributable to treatment and disposal, 6.3% to fixed capital,
21.2% to operations and maintenance, and 5.3% to overall
general administration.
Since the City of Arvada has no existing industrial user
charge formula and has not yet developed historic flow,
BOD and SS readings for industries, it was not possible
to determine current and estimated industrial user costs
and charges based upon loadings to the system, as could
be computed for the North Table Mountain and North Washington
Street Districts. However, it was possible to proceed
with the analysis and calculations of the total and unit
user charges by various functions. Tables 32 and 33
indicate these computations in the same manner as performed
for the other two districts. Administrative costs were
divided equally among all users, resulting in an annual
charge of only $1.52 per user. This primarily is a
reflection of economies of scale in the large numbers
of users versus the relatively small increase in
administrative costs per user.
Taking these unit costs for flow, BOD and SS, based on
the alternate formulas discussed previously, it was
possible to determine the applicable charge per 1000
gallons of flow, with a base effluent content, as shown in
Table 34. Since Arvada has not yet developed standard
BOD and SS levels for "normal domestic sewage," the factors
which were used reflect the average levels of BOD and SS
which were measured as influent into the treatment
facilities of the City of Arvada and those which were measured
on that portion flowing direct to MDSDD #1 (see Table 30).
Average BOD was 196 ppm and SS was 247 ppm. On this basis,
as shown in Table 34, calculations produced a processing
charge of approximately 21C per 1000 gallons. That is, for
each 1000 gallons of sewage pumped through the system,
based on assumed levels of content and known total operation-
al costs, it will cost approximately 21£ per 1000 gallons in
total charges to cover the total cost of operation.
61
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Table 31
WASTEWATER COSTS BY FUNCTION
1972
Cost Category
Personal Services
Sewer Charges (MDSDD)
Employee Retirement
Employee Insurance
Chemicals
Power and Heat
Telephone
Supplies
Other Contractual
Maintenance
Equipment
Fuel and Oil
Dues and Subscriptions
Capital Expenditures
Bond Principal and Interest
Data Processing
Administration
$13,988
1,049
327
2,025
25
25
6,250
$23,689
Operations and
Maintenance
$66,095
4,957
2,545
1,200
12,864
5,800
1,000
$94,461
Treatment
and Disposal
$32,399
243 ,966
2,430
1,247
4,400
3 ,800
288
550
2,251
5,970
1,100
200
Fixed
Capital
$28 ,217
Total
$112,482
243 ,966
8 ,436
4,119
5,600
3 ,800
288
2,575
2,251
18 ,859
6,900
1,200
25
28,217
$298 ,601
$28,217 $444,968
Note:
Also classified as Capital Expenditures was $75,000 for sewer mains in Far Horizons development.
These are being recaptured through tap charges and are not included. Also there was $149,305
in debt service; $64,130 in payment to Westminister for the Far Horizon system being repaid
through special assessment to property owners and $85,175 on bond principal and interest being
repaid through a mill levy. These are not included since repayment is already being
captured through other sources.
Source: City of Arvada, Department of Public Works
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Table 32
CALCULATION OF TOTAL AND UNIT USER CHARGES
BY FUNCTION
(Based on MDSDD #1 Allocation Formula)
Arvada Wastewater Control
1972
1. ADMINISTRATIVE EXPENSE (spread evenly among users)
Administrative expense $23,689
Total Users 15 ,607
2. OPERATIONS AND MAINTENANCE EXPENSE (per unit flow)
Operations and Maintenance expense $94,461
Total annual flow (millions of gallons, 1972) 2,003
3. TREATMENT AND DISPOSAL EXPENSE (Flow, BOD & SS)
Total Treatment and disposal expense $298,601
Allocation of Expense:
Flow = 45.5% 135,863
BOD = 30.9% 92,268
SS = 23.6% 70,470
(Source: MDSDD #1)
4. FIXED CAPITAL (Flow, BOD and SS)
Total annual fixed capital $28,217
Allocation of Expense:
Flow " = 45.5% 12,839
BOD = 30.9% 8,719
SS = 23.6% 6,659
(Source: MDSDD #1)
5. TOTAL UNIT COSTS PER USER AND PER UNIT FLOW, BOD AND SS.
Administrative Unit Costs (per user)
Administration$1.518
Flow Unit Costs (per 1,000 gallons)
Administration $0.000
Operations and Maintenance 0.047
Treatment and Disposal 0.068
Fixed Capital 0.006
Total per 1,000 gallons $0.121
Biochemical Oxygen Demand (BOD) unit costs (per ton)
Administration $0.000
Operations and Maintenance 0.000
Treatment and Disposal 56.330
Fixed Capital 5.323
Total per ton $61.653
Suspended Solids (SS) unit costs (per ton)
Administration $0.000
Operations and Maintenance 0.000
Treatment and Disposal 34.126
Fixed Capital 3.225
Total per ton $37 .351
63
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Table 33
$23,689
15,607
$94,461
2,003
CALCULATION OF TOTAL AND UNIT USER CHARGES
BY FUNCTION
(Based on WSSA Allocation Formula)
City of Arvada
1972
1. ADMINISTRATIVE EXPENSES (spread evenly among users)
Administrative expense
Total users
2. OPERATIONS AND MAINTENANCE EXPENSE (per unit of flow)
Total operations and maintenance expense
Total annual flow (millions of gallons)
3. TREATMENT AND DISPOSAL EXPENSE (flow, BOD, SS)
Total treatment and disposal expense $298,601
Allocation of expense:
Flow = 30% 89,580
BOD = 40% 119,441
SS = 30% 89,580
(Source WS&A)
4. FIXED CAPITAL (Flow, BOD 8 SS)
Total fixed capital expense $28,217
Allocation of Expense:
Flow = 45.5% 12,839
BOD = 30.9% 8,719
SS = 23.6% 6,659
(Source MDSDD #1)
5. TOTAL UNIT COSTS PER USER AND PER UNIT FLOW, BOD AND SS
Administrative Unit Cost (per user)
Administration '. 1.518
Flow Unit Cost (per 1,000 gallons)
Administration$0.000
Operations and Maintenance 0.047
Treatment 'and Disposal 0.045
Fixed Capital 0.006
Total per 1,000 gallons $0.098
Biochemical Oxygen Demand (BOD) unit costs (per ton)
Administration $0.000
Operations and Maintenance 0.000
Treatment and Disposal 72.919
Fixed Capital 5^323
Total per ton $78.242
Suspended Solids (SS) unit costs (per ton)
Administration $0.000
Operations and Maintenance 0.000
Treatment and Disposal 43.380
Fixed Capital 3.225
Total per ton 514 $46.605
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Table 34
APPLICABLE CHARGE PER 1000 GALLONS FLOW
WITH BASE EFFLUENT CONTENT
City of Arvada
1972
Given:
Flow = 1,000 gallons
BOD* = 196 ppm or .000818 tons
SS = 247 ppm or .001031 tons
Cost per 1,000 gallons based on MDSDD #1 allocations:
Flow = $0.121
'BOD = 0.050
SS = 0.038
Total = $0.209 per 1,000 gallons
Cost per 1,000 gallons based on WSSA allocation:
Flow = $0.098
BOD = 0.064
SS = 0.048
Total = $0.210 per 1,000 gallons
* Factors derived: ppm x 8,345 1 2000 - 1000 = tons/1000 gallons
Note: Assumed levels of BOD (196 ppm) and SS (247 ppm)
are those levels measured as influent at the Arvada
treatment plant and by MDSDD #1, (see Table 30).
No assigned levels have been determined for "normal
domestic sewage."
65
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Based on these calculations, Table 35 was developed to
determine the total estimated operational surplus/deficit
for expenses vs. revenue, as well as the difference found
between the calculated and the actual charges for each of
the two user classes.
Total revenue in 1972 was $430,845, while expenses for^that
period totalled $444,968, resulting in an actual deficit
of $14,123 in the wastewater division operation. Total_
estimated user charges, based on equitable cost allocation
derived in Tables 32-34, would have resulted in revenues
of $444,263, a deficit of $705 as related to>expenses.
Calculated revenues should equal expenses, (i.e., no
deficit); the difference is due to rounding in the
formulae steps.
When evaluating the relative cost absorptive factors for
each user class, residential users actually paid almost
$9,000 more than would have been paid through the caluclated
user charge formula. Commercial and industrial users were
charged on the same rate basis, with no relationship to
system loadings, so that certain industrial users, probably
in particular those 4 firms now singled out for the sampling
program, paid significantly less than would have been the
case under an equitable user charge allocation procedure.
The calculated residential contribution would have resulted
in an average customer charge of $25.88 per year, or
$2.16 per month, as opposed to the current typical monthly
charge of $2.23 for customers within the district and $4.03
per customer outside the district.
The accounting and cost allocation procedures of the City
of Arvada for wastewater functions are basically complete
and reliable and are appropriate for distribution in user
charge allocations. Procedures for industrial classification
and sampling are now underway, as well as a revision in the'
user charge schedule which will levy equitable user charges
based on the system contributions of the user.
It may be concluded through this analysis , using the assump-
tions inherent in that analysis, that while the City of
Arvada is not now in compliance with current federal user
charge/industrial cost recovery guidelines, positive and
progressive steps are being taken by the City to establish
equitable user charges and achieve full compliance.
66
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Table 35
ESTIMATED AND ACTUAL CHARGES BY USER CLASS
City of Arvada
Estimated Actual
Number User Charges Charge Difference %^
Residential 15,218 $393,8>4l $402,830 +$8,989 +2.2
Commercial 1 389 50,422 28,015 -22,409 -80.0
TOTAL
Expenses
Deficit
15,607 444,253
(2)
$444,968
$ 705
$430,845 -13,418
$444,968
$ 14,123
-3.1
Residential based on annual charge of $1.52 plus usage at 116,000
gallons per year with a processing cost of $0.210 per 1000 gallons
Commercial based on an annual charge of $1.52 plus usage at
610,000 gallons per year with a processing cost of $0.210 per
1000 gallons.
Includes all other users including industrial.
Represents total expenses for 1972(See Table 31).
67
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SECTION VI
INDUSTRIAL COST RECOVERY
Recovery of Grant Funds
Wastewater agencies which apply to the United States
Environmental Protection Agency for construction grants
for waste treatment facilities are subject to the pre-
requisites that provision has been made for payment to the
applicant by industrial users of that portion of the
federal construction grant allocable to the treatment of
industrial wastes. Accordingly, the burden of paying for
that portion of the facility capacity allocable to industry
demand must be borne by all industrial users. The
rationale behind this requirement is the prevention of
federal subsidies to industry; any other approach would be
considered to discriminate against those industries which,
for whatever reason, were unable to utilize a publicly-
owned treatment works.
The main characteristics of this industrial cost recovery
requirement are outlined below.
1. Cost recovery shall take into account all of those
factors significantly influencing the cost, such
as strength, volume and flow characteristics.
2. Industrial user share of allocable costs shall be
adjusted depending on:
(a) Changes in strength, volume or delivered
flow rate;
(b) Proportionate industrial share of the cost
of expanding or upgrading of the treatment
works.
3. Industrial share of facility cost shall not include
any portion of the grant amount allocable to
unused or unreserved capacity.
4. Conversely, the industrial share of facility cost
shall include the cost of allocable or reserved
capacity as a result of any firm committment to
the grantee of increased use by such user.
5. Industrial users will be required to pay their
share on an annual or more frequent schedule,
exclusive of interest, on the basis of the total
allocable costs divided by the useful life of
the facility in years, or 30 years, whichever is less,
69
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Determination of the actual proportion of total facility
cost can be accomplished at several levels of detail.
Ideally, the wastewater contribution of each user could be
allocated to each treatment function, and the cost of pro-
viding that function then be apportioned directly back to
each user. Approaching the problem at this level of
detail requires extensive knowledge of system requirements
and operations, as well as detailed cost analyses which
could change significantly over the period, requiring
complex and costly adjustments in developing and
maintaining cost allocations. Recognizing these difficul-
ties , the EPA regulations place a minimum requirement as
a cost recovery guideline:
"As a minimum, an industry's share shall be
based on its flow versus treatment works
capacity except in unusual cases."
This, in effect, could permit the industrial user share
to be computed on the same basis as for other users if the
content of industrial wastes is found comparable to
that of normal domestic users. Such a finding is quite
unlikely and, unless documented, would doubtless be
considered to result in industry grossly underpaying its
share under the guidelines. On the other hand,
where detailed loading and content data are not
immediately available, the method does provide a means
of approximating proportional responsibility, and may
be acceptable on an interim or transitional basis.
Another factor which must be considered by the various
wastewater treatment agencies is that the EPA requirement
for capital cost recovery applies only to the extent
attributable to the federal share and only to the
portion of costs allocable to the treatment of industrial
wastes. Certain costs are ineligible under EPA regulations
but may be included by the grantee at the grantee's option.
Ineligible costs include land, pre-treatment and collection
sewers. As part of the determination of those facility
costs attributable to indutry, certain usage characteristics
must be considered. Many industries do not operate on a
continuous basis. That is, some industries are seasonal
while others may place peak demands on the system during
certain hours of the day. Proper allocation of capital
costs must take into account these peak use characteristics,
as they represent important elements both to the design,
and therefore, cost of the facility and to the allocation of
utilization. Peaking or peak demand characteristics can
cause severe problems in treatment operation in terms of
overloading and may result in inadequate treatment.
Approaches to considering these problems must be included in
cost apportionment.
70
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Another point apparent in the regulations is that, to meet
EPA requirements, the total industry share must be recovered.
An industrial user's share shall be based on all factors
which significantly influence the cost of the treatment
works/87
Obviously, the fairness of the allocation among industries
is a function of the application of data each wastewater
agency maintains concerning the flow, volume and loadings
of each industry. As in the case of user charge allocations
in the North Washington Street Water and Sanitation
District, a similar approach can be used to determine an
equitable level of grant recovery. In this case, it would
be necessary to split the project costs according to those
which should be distributed evenly and those which are
allocable to the variable components of demand.
Hypothetical Example for Recovery of Grant Funds
In order to more easily assess the impacts and requirements
of the EPA guidelines as they relate to industrial cost
recovery, a hypothetical example was developed to show the
various relationships.
Table 36 shows the determination of allowable costs,
examples of ineligible costs, and grant funding available.
In this example, of the total project cost of $500,000,
$100,000 are ineligible for grant funding.
Carrying further the evaluation of what is included in
eligible costs, Table 37 reflects a more complete break-
down in what can be considered for grant funding. Since
it is assumed that the grant will cover 75% of total
eligible costs ($300,000 of $400,000), each category was
proportioned equally.
In order to determine the proportion of capital cost
chargeable to industrial users, it is then necessary to
determine the portion of costs attributable to each
function (flow, BOD and SS). Table 38 shows an assumed
cost allocation of grant fund items to each category. In
this example, costs related to flow account for 54.2%
of the total, BOD at 35.8% and SS at 10%. This analysis
allows the computation of the industrial share based on
loadings to the system and measurement of their contribution,
Certain assumptions were required to carry forward this
hypothetical example. Table 39 sets forth' these basic
assumptions, allocating 22.8% to flow costs, 43.5% of BOD
costs and 75.4% of SS costs to industrial users. Therefore,
it will be necessary to recover these relative costs from
new and existing industries which contribute to the total
system.
71
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Table 36
DETERMINATION OF ALLOWABLE COSTS AND PL 92500 GRANT
Example of Treatment Facility Capital Costs
Chargeable to Industrial Users
COST CATEGORY AMOUNT
1. Project Cost $500,000
2. Ineligible costs
Land $50,000
Pre-Treatment $20,000
Collection Sewers $30,000 $100,000
3. Eligible Costs $.400,000
4. PL 92500 Grant @ 75 percent $300,000
(1)
The conditions of the grant require that the portion of the
grant ascribed to industry must be recovered. Regulations
neither require or in any way limit the recovery by the
specific agency of certain ineligible costs such as land,
pre-treatment or collection sewers.
72
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Table 37
ELIGIBLE AND INELIGIBLE PROJECT COST ITEMS
TOTAL AND GRANT PORTION
Example of Treatment Facility Capital Costs Chargeable to
Industrial Users
Allocable
Cost Item Total to Grant
Intercepting Sewers $127,000 $95,250
Treatment Plant
Main Pumping Station
Equipment 5,600 4,200
Structures 4,400 3,300
Screen and Grit Chambers 5,600 4,200
Preliminary Sed. Tanks 16,400 12,300
Trickling Filters 109,000 81,750
Final Sed. Tanks 32,800 24,600
Recirculation Pumps 2,800 2,100
Chlor. Tanks and Equip. 7,200 5,400
Dig. Tanks and Vac. Filters 29,200 21,900
Subtotal $340,000 $255,000
Main Control Bldg. 27,200 20,400
Plant Water Supply 9,200 6,900
Roads and Grounds 9,200 6,900
Plumbing and Heating 14,400 10,800
TOTAL ELIGIBLE COSTS $400,000 $300,000
Ineligible Costs
Land $50,000
Pre-Treatment 20,000
Collection Sewers 30,000
TOTAL PROJECT COSTS $500,000
Note: Since it is assumed that 75 percent of the eligible
project costs will be grant funds, the eligible costs
were proportioned evenly.
73
-------
Table 38
GRANT PROJECT ITEMS ALLOCATED TO FLOW, BOD AND SS
(Example)
Project Item
Intercepting Sewers
Treatment Plant
Main Pumping Station
Equipment
Structures
Screen and Grit Chambers
Preliminary Sed. Tanks
Trickling Filters
Final Sed. Tanks
Recirculation Pumps
Chlor. Tanks and Equip.
Dig. Tanks and Vac. Filters
Subtotal
Main Control Bldg.
Plant Water Supply
Roads and Grounds
Plumbing and Heating
Subtotal
TOTAL GRANT AMOUNT
Cost Allocation Item
Source:
%
100.
100.
100.
60.
85.
10.
50.
40.
54.
54.
54.
54.
54.
54.
ates
0
0
0
0
0
0
0
0
2
2
2
2
2
2
Flow
Amount
$95,250
4,200
3 ,300
2,520
10,460
8 ,200
12,300
2,160
$138 ,390
11,060
3,740
3 ,740
5,850
$24,390
$162,780
and Equitable
SS
BOD
% Amount %
40.
15.
100.
10.
10.
10.
10.
10.
10.
0 :
0
0
0 $
0
0
0
0
0
$
Recovery
$1
1
21
25
2
1
$4
29
of
,680
,840
,900
,420
,040
690
690
,080
,500
,920
90.0
50.0
100.0
60.0
35.8
35.8
35.8
35.8
35.8
35.8
Industrial
TOTAL
Amount
$73
12
2
3
$91
7
2
2
3
$16
$107
,550
,300
,100
,240
,190
,300
,470
,470
,870
,110
,300
$95,250
4,200
3,300
4,200
12 ,300
81,750
24,600
2,100
5,400
21
$255
20
6
6
10
$45
$300
,900
,000
,400
,900
,900
,800
,000
,000
Waste Treatment
Costs in Municipal Systems, E. P. A., October, 1971.
-------
Table 39
ASSUMPTIONS
Example of Treatment Facility Capital
Costs Chargeable to Industrial Users
1. The plant runs at 90 percent capacity.
2. There is no reserved capacity.
3. On the basis of flow, industry is responsible for 22
per&ent of flow costs.
<4. Industry is responsible for 43.5 percent of BOD
processed on an annual basis.
5. Industry is responsible for 75.4 percent of the SS
processed on an annual basis.
75
-------
Finally, Table 40 shows the dollar amounts which must be
regained, both in total and annually based on expected
useful life of the facility. Of the total $500,000
dollar facility cost, $400,000 are costs eligible for
grant consideration. Based on a 75% grant ($300,000)
and assumed industrial contributions, $95,700 must be
recovered from industrial users. Based on the expected
useful life of the facility, this results in a user charge
repayment by industry of $3,190 per year.
No attempt is made herein to describe the procedures
for local retention of portions of the industrial cost
recovery, or the uses which must be made of the
retention. These matters are adequately covered in the
federal guidelines.
Relating Example to Local District
In order to more clearly structure such a hypothetical
example of cost recovery, and in order to relate the overall
impact on user charges, these circumstances will be related
to a local district. Since North Table Mountain Water
and Sanitation District is relatively new, is rapidly
expanding, and currently has no treatment facilities,
it was selected to project revenue changes which sould
occur under such a capital improvement program.
The hypothetical example is that of constructing a second-
ary treatment facility, capable of handling all waste-
water from the district users, and thus eliminate
discharge to MDSDD #1. Current users and system loading
will be taken from the previous report section detailing
NTMWSSD user charges and cost allocations. Table 41 indicates
the existing circumstances and the future conditions assumed
to exist when the "treatment facility" is completed.
Overall,system users will total 1,627 contributing 645 mg.
of flow, containing 515 tons of BOD and 712 tons of SS.
This results in an average annual daily flow of 1.77
mg. Assuming the proposed plant will operate at 90 percent
of capacity, average capacity required would be 1.97 mg.
per day. To design the plant for peak day characteristics
will require a design capacity of 2.95 mg. per day.
Assuming an average construction cost of $170,000 per
million gallons per day, total capital costs would be
$500,000. This relates directly back to the previous
analysis on the hypothetical cost recovery apportionments
for capital grants.
Also, note that under the assumed future situation shown
in Table 41, industry will account for 22.8% of the flow,
43.5% of the BOD and 75.4% of the SS. This also agrees
with the allocation ratios for cost described earlier.
76
-------
Table 40
GRANT RECOVERY FROM INDUSTRY
Example of Treatment Facility Capital Costs
Chargeable to Industrial Users
Flow Charges - Grant Portion:
Flow Capital Costs
Percent of Plant Used (90%)
Percent Industrial (22.8%)
Useful Life (30 yrs.)
BOD Charges:
BOD Capital Costs
Percent of Plant Used (90%)
Percent Industrial (43.5%)
Useful Life (30 yrs.)
$162,780
146,500
33,400
1,113/yr.
$107,300
96,570
42,000
1,400/yr,
SS Charges:
SS Capital Costs
Percent of Plant Used (90%)
Percent Industrial (75.4%)
Useful Life (30 yrs.)
29,920
26,900
20,300
677/yr.
TOTAL:
(annual)
Flow
BOD
SS
1,113
1,400
677
$ 3,190
Note:
Percent Industrial refers to the percentage of flow
attributable to industry, not percent of plant
capacity.
77
-------
Table 41
CURRENT AND ASSUMED SYSTEM
North Table Mountain Water and Sanitation District
TYPE USER
NUMBER - 1972
1972
"EOD SS
Tons Tons
NUMBER
ASSUMED
FUTURE
SS
Tons
Residential
467
142
83
50
1600
488
285
171
Commercial
10
20
10
Industrial
TOTAL
480
63
210
68
154
250
302
1627
147
645
224
515
537
712
Note: 1972 loadings reflect final apportionment of MDSDD #1 totals among user classes. This resulted
in BOD levels of 140 ppm for residential and 144 ppm for commercial; SS levels were 84ppm
residential and 96 ppm commercial. Residential flow at 305,000 gallons/yr; commercial
flow at 500,000 gallons/yr. Current industrial users remain the same-on Flow, BOD and SS
levels. Four new industries usage and load shown in the following table. These are not levels
of "normal domestic sewage." See Section V for further explanation.
Source: The North Table Mountain Water and Sanitation District
Future assumptions by Wilbur Smith and Associates.
-------
It was assumed that four additional industries would
discharge wastes to the system. Table 42 shows a break-
down of these industries, giving assumed flow, BOD
and SS content. This calculation also would allow for
proper apportionment of capital grant recovery charges
to appropriate industries.
In order to determine revised user charges for all user
classes, it was necessary to project possible costs,
broken down by operational function, as shown in Table
43. Note that treatment and disposal costs have increased
somewhat even though there are no longer any direct charges
from MDSDD #1. Also, the $23,100 fixed capital charges
reflect the annual portion of debt service necessary to
recover capital cost expenditures in excess of the $300,000
grant funds; the remaining $200,000 is amortized at an
interest rate of approximately 5 3/4% over a 15 year period.
This results in the average annual repayment of $23,100.
Taking the total costs per function and allocating this
to flow, BOD and SS, unit costs were developed as
indicated in Table 44. Allocation of treatment and
disposal costs are the same as used earlier in the report
(Section V). Allocation of fixed capital costs are those
projected for the construction of this hypothetical treatment
plant earlier in this section.
Based on these unit costs and estimated industry
loadings, charges for industrial users were calculated.
The seven industries would be required to pay a total of
about $27,000 to cover their contribution for system
loadings, as shown in Table 45.
In order to determine appropriate residential and commercial
charges, development of a per 1000 gallon charge (containing
base effluent levels) was necessary. Using the alternate
allocations of previous examples, this resulted in a
necessary charge of $.080 per 1000 gallons for residential
users and $.081 per 1000 gallons for commercial users. The
derivation of these ratios is shown in Table 46.
Utilizing the applicable charges developed in Table 46,
and assuming certain levels of flow for residential and
commercial users, estimated charges were developed.
Industrial charges from Table 45 were added to determine
total applicable charges. These estimated charges are
adequate to cover total operating expenses, as indicated
in Table 47.
Also shown in Table 47 is the combination of industrial
user charges and capital grant recovery charges to deter-
mine the total industrial obligation to cost recovery.
These charges should be apportioned to each industrv
based on each industry's contribution to the system.
79
-------
Table 42
FUTURE INDUSTRIAL USERS
ASSUMED EFFLUENT LEVELS
Industry A
Industry B
Industry C
Industry D
TOTAL
Source: Wilbur Smith and Associates
Flow
mg
ğ
28
25
17
84
BOD
ppm tons
400 23
300 35
600 63
500 35
156
SS
Ppm
1200
600
800
900
ton
70
70
83
64
287
80
-------
Table 43
ASSUMED COSTS BY FUNCTION
North Table Mountain Water and Sanitation District
(In 1972 Dollars)
FUNCTION
CO
H
COST CATEGORY
Salaries
Engineering
Maintenance
Power-Water
Telemetering
Auto Costs
Tools
Lab Analysis
Audit Fee
Director's Fee
Legal Fees
Insurance
Dues
Printing and Misc.
Office Rent
Office Supplies
Payroll Taxes
Telephone
Capital Expenditures
ADMINISTRATIVE
$4,000
2,000
200
200
1,600
800
150
50
200
300
200
200
100
(non-grant portion)
TOTAL $10,000
OPERATIONS
MAINTENANCE
$2,000
2,000
2,300
600
800
100
$7,800
TREATMENT AND
DISPOSAL
$20,000
6,000
4,600
200
800
2,100
1,000
1,200
100
$36,000
FIXED
CAPITAL
$23,100
TOTAL
$20,000
10,000
2,300
4,800
200
600
1,600
2,100
200
1,600
800
1,150
50
200
300
200
1,500
200
23,100
$23,100 $76,900
-------
Table 44
ASSUMED TOTAL AND UNIT USER CHARGES
North Table Mountain Water and Sanitation District
1. ADMINISTRATIVE EXPENSES
Administration expense $10,000
Total users 1,627
2. OPERATIONS AND MAINTENANCE EXPENSE
Total operations and maintenance expense $ 7,800
Total annual flow (mg) 645
3. TREATMENT AND DISPOSAL EXPENSE
Total treatment and disposal expense $36,000
Allocation of expense:
Flow . = 30.0% 10,800
BOD = 40.0% 14,400
SS = 30.0% 10,800
4. FIXED CAPITAL EXPENSE
Total annual fixed capital expense $23,100
Allocation of expense:
Flow = 54.2% 12,520
BOD = 35.8% 8,270
SS = 10.0% 2,310
5. TOTAL UNIT COSTS PER USER AND PER UNIT FLOW, BOD AND SS
Administrative Unit Costs (per user) $6.15
Flow Unit Costs (per 1,000 gallons)
Administration $0.000
Operations and Maintenance 0.012
Treatment and Disposal 0.017
Fixed Capital 0.019
TOTAL $0.048
BOD Unit Costs (per ton)
Administration $0.000
Operations and Maintenance 0.000
Treatment and Disposal 27.961
Fixed Capital 16 ] 058
TOTAL $447019
SS Unit Costs (per ton)
Administration $0.000
Operations and Maintenance 0.000
Treatment and Disposal 15.169
Fixed Capital 3 244
TOTAL $I874T3
82
-------
Table 45
CALCULATED CHARGES FOR INDUSTRIES-
BASED ON ASSUMED CONDITIONS
North Table Mountain Water and Sanitation District
TYPE OF CHARGE QUANTITY RATE AMOUNT
Administration 7 $6.15 $43.00
Flow (mg) 147 $48.00 7,056.00
BOD "(ton) 224 $44.02 9,860.00
SS (ton) 537 $18.41 9,890.00
Total Calculated Charge $26,849.00
83
-------
Table 46
APPLICABLE CHARGE PER 1,000 GALLONS FLOW
BASED ON CONTENT AND FLOW ASSUMPTIONS
North Table Mountain Water and Sanitation District
Given:
Flow
BOD*
SS
1,000 gallons
residential - 140 ppm or .000584 tons/1000 gallons
commercial - 144 ppm or .000601 tons/ 1000 gallons
residential - 84 ppm or .000350 tons/1000 gallons
commercial - 96 ppm or .000401 tons/1000 gallons
Cost per 1000 gallons -
Flow
BOD
SS
TOTAL
Factors derived: ppm x
Residential
$0.048
0.026
0.006
$0.080
345 - 2000 - 1000
Commercial
$0.048
0.026
0.007
$0.081
tons/1000 gallons
Note: BOD and SS levels should not be construed as "normal
domestic sewage," but merely apportioned factors relating
to NTMWSD only. See Section V for further explanation.
84
-------
Table 47
ESTIMATED CHARGE FOR ALL USERS
BASED ON ASSUMED CONDITIONS
North Table Mountain Water and Sewer District
TYPE USER NUMBER
ESTIMATED CHARGE
Residential 1600 $48,752
Commercial 20 933
Industrial 7 26,849
TOTAL 1627 $76,534
Actual Expenses $76
Note: Residential based on a per user charge of $6.15 plus a cost
of $0.080 per 1000 gallons and a usage of 304,000 gallons.
Commercial based on a per user charge of $6.15 plus a cost
of $0.081 per 1000 gallons and a usage of 500,000 gallons.
Industrial from Table 45.
Total Industrial User Charges Based on Assumed Conditions
North Table Mountain Water and Sanitation District
Industrial User Charges $26,849
Capital Grant Recovery Charges 3,190
TOTAL $30,039
85
-------
Average residential monthly charges under "the existing
system and cost allocations were estimated to be about
$5.00 (see Section V), but are only about $2.50 under
the hypothetical situation; the average charges to each
industry were calculated to be about $6,700 per year
under existing practices but are only $3,835 under the
hypothetical example. This alone should not be construed
as justification for such a capital improvement program.
Total costs could vary considerably from those assumed in
the example, and correspondingly affect operating expenses.
Also, lower user charges may also be directly related to
economies of scale; for example, lower administrative_costs
per user may occur as the number of users increases without
capital improvement expenditures of this type. In fact,
the "savings" may be even greater if large scale capital
expenditures were foregone. Any specific situation must be
evaluated on its own merits, utilizing far more sophisticated
cost allocation and cost estimation techniques than were
necessary for this "broad-brush" hypothetical example to
be used only for procedural evaluations and formulation.
Industrial Allocation of Capital Grant Recovery Charges
In order to better assess the impact of future charge
schedules on each participating industry it is necessary
to carry our examples one step further. Instead of 7
industries to come on-line when the plant opens as shown
in the previous section, only the 3 existing industries will
be included for Year 1 of operation. The 4 additional
industries will come on the system in Year 2. Therefore,
Year 2 in this example closely approximates the situation in
the previous example, "Relating Example to Local District."
The following assumptions are made:
1. The treatment facility is constructed during
future Year X and when coming on-line has 1600
residential users, 20 commercial users and 3
industrial users. These industries account for
8.8% of capacity flow, 11.9% of BOD and 31.6%
of SS (the same as existing industries shown in
Table 41).
2. Costs and grant recovery portions are as shown in
Tables 36 - 38.
3. The following year, 4 additional industrial users
join the system having the discharge characteristics
shown in Table 42.
4. Costs will remain the same as shown in Table 43
for both years.
86
-------
Table 48 reflects the loading characteristics of the 3
industries on-line when the facility opens (Year 1).
Each industry's share of flow, BOD and SS are computed to
determine the relationship each should bear to the repayment
of the appropriate portion of the federal grant which
must be recovered. Note that these total loadings
relate to the numbers derived in Table 41 and earlier in
Section V. Also shown is the amount of the capital grant
recoverable based on their proportionate contribution to the
system for flow, BOD and SS. This total of $36,547
represents 12.2% of the total capital grant.
Table 49 takes these percentage relationships for the
3 industries and applies them to the recoverable total
charge for each loading breakdown. The total annual charge
and the breakdown for the applicable recovery attributable
to flow, BOD, and SS are the same as derived in Table 48.
This results in Industry 1 having an obligation of $644,
Industry 2 having an obligation of $182 and Industry 3 having
an obligation of $392. This recovers the total annual
grant recovery charge of $1,218 equitably from each industry
based on its contribution to the system.
Following the hypothetical assumptions further, during the
next year (Year 2) four new industries are constructed
and come on the system. Table 50 details the flow, BOD
and SS contributions of each of the seven industries
now on the system. (These are the same as assumed for
initial operation in the previous example, "Relating
Example to Local District"). The new percentage
relationships are now computed to determine each industry s new
relative portion of industrial load on the system. Industry 1,
for example, contributed 60.4% of the total industrial flow
during Year 1, but only 25.9% during Year 2. The recover-
able portion of the capital grant now increases to 32.0%
of the total, representing industry's increasingly propor-
tionate share of system usage.
These new percentage relationships can now be applied to the
amount of capital grant required to be recovered. Table 51
reflects these reallocations in Year 2. Note that the total
amount to be recovered and each sub-amount related to flow,
BOD and SS are not the same as shown in Table 49 (Year 1
recovery). The total (and annual) amount subject to recovery
must be recomputed each year based on total industrial
contribution during the 30 year period (or life oħ tne
project), based on new industries beginning service, indus-
tries going off-line and changes in flow, BOD and SS levels
from year to year. In this example, effluent loadings for
Industries 1, 2 and 3 were kept constant from Year 1 to
Year 2.
This Year 2 reallocation changes the amount^paid by
existing industry (1, 2 and 3) from $1,218 in Year 1
87
-------
Table 48
EXISTING INDUSTRIAL USERS
ASSUMED FUTURE EFFLUENT LEVELS
Year 1
Industry
1
2
3
TOTAL
Flow
(mg)
38
10
15
63
1
60.4
16.1
23.5
BOD
(tons)
33
11
24
68
49.0
16.3
34.7
SS
(tons)
117
29
104
250
%
46.
11.
41.
7
5
8
Total Plant Capacity 715
Industry %
of Plant Capacity 8.8
Total Grant
$162,780
572
11.9
791
31.6
TOTAL
$107,300 $29,920 $300,000
Industrial
Cost Recovery
$ 14,324
$ 12,768 $ 9,455 $ 36,547
Annual Industrial
Cost Recovery $ 477
(based on 30 years)
$ 426
$ 315 $ 1,218
88
-------
Table 49
ALLOCATION OF CAPITAL GRANT RECOVERY
THREE "EXISTING" INDUSTRIES
Year 1
(Annual Charge)
Industry
1
2
3
Flow
%
60.4
16.1
23.5
Flow
Charge
$288
77
112
BOD
%
"49.0
16.3
34.7
BOD
Charge
$209
69
148
SS
%
46.7
11.5
41.8
SS
Charge
$147
36
132
Total
Charge
$644
182
392
TOTAL ANNUAL CHARGE $477 $426 $315 $1,218
See Table 48 for derivation of amounts
Source: Wilbur Smith and Associates
89
-------
j. a.j_>-Le: j u
FUTURE INDUSTRIAL USERS
ASSUMED EFFLUENT LEVELS
Year 2
lustry
1
2
3
A
B
C
D
Flow
mg
38
10
15
14
28
25
17
25.
6.
10.
9.
19.
17.
11.
9
8
2
5
0
0
6
BOD
Tons
33
11
24
23
35
63
3_5
14.
4.
10.
10.
15.
28.
15.
8
9
7
3
6
1
6
SS
Tons
117
29
104
70
70
83
ii
21.
5.
19.
13.
13.
15.
11.
8
4
4
0
0
5
9
TOTAL
147
224
537
Total Plant
Capacity
715
Industry % of 20.6
Plant Capacity
Total Grant
Industrial
Cost Recovery
Industrial Cost $ 1,118
Annual (30 years)
Recovery
572
39.2
$ 1,402
791
67.9
$677
TOTAL
$162,780
$ 33,533
$107,300
$ 42,061
$29,920 $300,000
$ 20,316 $ 95,910
$3,197
Note: Industries 1, 2 and 3 from Table 48.
Industries A, B, C and D from Table 42.
Total industrial grant recovery ($3,197) varies' slightly
from the amount derived in Table 40 due to rounding in
percentages.
Source: Wilbur Smith and Associates
90
-------
Table 51
ALLOCATION OF CAPITAL GRANT RECOVERY
SEVEN "FUTURE" INDUSTRIES
Year 2
(Annual Charge)
Industry
A
B
D
TOTAL
Flow Flow BOD BOD SS SS Total
Charge % Charge % Charges Charge
25.9 $290
6.8
10.2
9.5
19.0
17.0
11.6
76
(1)
106
212
190
130
$1,118
14.8 $207 21.8 $148
4.9 69 5.4 37
10.7 150 19.4 131
10.3 144 13.0 88
15.6 219 13.0 88
28.1 394 15.5 105
15.6 219 11.9 80
$1,402 $677
$645
182
395
338
519
689
429
$3,197
See Table 50 for derivation of amounts
Source: Wilbur Smith and Associates
91
-------
to $1,222 in Year 2. The new industries are required to
repay their fair share based on usage and account for the
remaining $1,975, for Year 2 operations. The relatively
equal amount paid by industries 1, 2 and 3 is a result
of retaining flow, BOD and SS quantities the same from
Year 1 to Year 2. In reality, as these will change, so
will the actual dollars charged.
Table 52 takes this cost recovery procedure through the 30
year period in a general way. Detailed allocations
by industry are not computed and the industrial share
allocations are arbitrary assumptions. These, in reality,
would be computed as shown in Tables 48 - 51 and broken
down by individual industry.
As Table 52 shows, the total grant amount ($300,000) remains
the same every year. Industry's contribution share is
applied to this each year to determine the total amount to
be recovered in that year. This is necessary since the total
industrial share will probably change from year to year
as will each industry's contribution.
If there is no industrial waste discharge, then no recovery
is required. For example, during the latter half of the
30 year recovery period portrayed in Table 52, industry
began to decline and during the last two years all industries
had ceased operations. Therefore, no recovery was
required. Industry must pay its share of the system
usage, but only that amount.
Over the hypothetical 30 year period, industry would repay
23.5% of the total capital grant, reflecting the
weighted proportionate share of industry contribution during
this time.
92
-------
Table b'2
HYPOTHETICAL COST RECOVERY SCHEDULE
Industrial Allocation
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
TOTAL
Industry
Share (%)
12.2
32.0
34.8
31.1
26.5
29.0
32.1
34.8
31.6
40.0
38.6
37.5
31.8
33.0
30.0
27.2
28.6
25.0
26.1
23.8
16.5
17.2
17.8
16.0
11.1
11.0
5.0
5.4
0.0
0.0
23.5
(1)
Total,9s
Grantv '
$300,000
Industrial
Recovery Portion
$36,600
96,000
104,400
93,300
79,500
87,000
96,300
104,400
94,800
120,000
115,800
112,500
95,400
99,000
90,000
81,600
85,800
75,000
78,300
71,400
49,500
51,600
53,400
48,000
33,300
33 ,000
15,000
16,200
-0-
0
(3)
$300,000
Annual
Payments
$1,220
3,200
3 ,480
3,100
2,650
2,900
3,210
3 ,480
3,160
4,000
3,860
3,750
3 ,180
3,300
3,000
2,720
2,860
2,500
2,610
2,380
1,650
1,720
1,780
1,600
1,110
1,100
500
540
-0-
-0-
$70,560
(1)
Based on total plant capacity and available unused capacity, maximum
industrial contribution would be 41.8% (30.3% flow, 49.1% BOD
and 77.9% SS).
^Remains the same throughout useful life.
(3)
Based on 30 year useful life.
Source: Wilbur Smith and Associates
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SECTION VII
PREREQUISITES TO A USER CHARGE SYSTEM
The selection and adoption of a user charge system is not
a simple matter. Many diverse factors and considerations
influence the formulation of user charges.
Public Acceptance
Not surprisingly, the concept of user charges and indus-
trial cost recovery promulgated by EPA is not universally
embraced or even understood. Attitudes concerning user
charges may well include the view that it is an "insidious
form of taxation," or "in conflict with economic develop-
ment activities," or "inconsistent with economic princi-
ples" (decreasing unit costs). Further, it may be viewed
as "dictatorial" or "federal interference in local
affairs." All of these views have been reflected in
various newspaper accounts from localities across the nation
in recent months.
Without debating the relative merits of user charges
versus other forms of revenue measures, suffice it to
say that a municipality or other agency contemplating
the adoption of a schedule of user charges to meet EPA
guidelines is advised to conduct an enlightened program
of citizen education, provide strong policy leadership,
and insure that its proposals are based upon factual,
technical information.
Industrial Data
It is simply not possible to develop an equitable and
realistic program of industrial user charges without
data as to the requirements which industrial users
place upon the wastewater system. Typical base data
requirements include:
1. Type establishment; principal products
2. Number of employees by work shift
3. Source(s) of water supply
4. Volume of water use
5. Uses of water
6. Type processes utilized
7. Waste disposal points
8. Composition, volume and flow rate of wastes
discharged
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Such data will permit the wastewater agency to identify
the potential dischargers of non-domestic wastes, as well
as the characteristic magnitude and composition of those
discharges. This facilitates the selection of those
industries to be included in the sampling program.
To the wastewater agency, a "know your industry" posture
is essential to effective wastewater management. Regular
personal contacts should supplement technical data collec-
tion and sampling programs.
One of the prerequisites to approval of construction
grants is a determination by EPA that the applicant "has
legal, institutional, managerial, and financial
capability to insure adequate construction, operation
and maintenance of treatment works." It is not beyond
comprehension that an agency failing to develop or employ
adequate base data on users and treatment costs may be
found to not meet this criterion.
Accounting And Cost Allocation
The preceding study, Institutional and Financial Arrange-
ments for Wastewater Management - Denver SMSA, revealed
a wide disparity of accounting practices and a general
failure (except among such agencies as MDSDD #1 and
City and County of Denver) to maintain a classification
of accounts which permitted cost allocation to the
various wastewater cost components. This reveals a
general variance from guideline requirements that adequate
documentation for user charge measures be maintained.
To develop a user charge system to meet EPA guidelines
appears to dictate that a separate wastewater "fund" be
established within the accounting systems of all agencies;
further, that this fund be also broken down into functional
account codes such as "administration," "collection system,"
"pumping," "primary treatment," "sludge disposal," etc.
Sub-classifications within these functions should include
"salaries and wages," "maintenance and repair," "capital
expenditures," debt service," etc. ^' A purely "line item"
classification will not produce the necessary information.
Obviously, particularly in the smaller agencies, it is
difficult to allocate the time of a work crew or piece
of equipment which, in the course of a day or week
performs in several functional areas. Yet, it should be
possible to develop a relatively simple (if necessary,
subsidiary) accounting procedure to allocate costs to
the various functions as needed to support and document
the user charge derivation. Without this, there is no
realistic or equitable way to allocate costs to function
or to users.
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User Charge Schedule
While the EPA guidelines define "treatment works" to
include all physical components of the wastewater system,
there are certain capital cost components which may or may
not be recovered by user charges. Primary among these are
the collection system and the local share of a capital
grant program.
The EPA guidelines neither require not prohibit financing
the initial installation or subsequent extension of the
collection system from user charges. Most wastewater
agencies regard the construction of the collection system
as of unique special benefit to the property served,
and levy a tap charge, frontage charge, or special assessment
for connection which is sufficient to recovery of the costs
of the extension. For those agencies which operate under
this principle, the user charges are then designed only to
provide maintenance and repair of the collection system,
plus the other cost components of the total wastewater system.
The derivation and use of the "plant investment fee," as
currently levied by some agencies in the SMSA, may be subject
to scrutiny under the established guidelines unless it is
based on a "user charge" type allocation to reflect relative
system usage.
The local share of a capital grant improvement program may
be recovered at the discretion of the local agency. If
it is a system-wide improvement affecting all users,
equitibility could be achieved by recovery through the user
charge system. If it is of special benefit to only a
segment of system customers (i.e., a secondary collection
system) more equitibility could be achieved by recovery
through some type of special assessment to the affected
customers.
In some instances in the Denver SMSA, the initial construction
or subsequent extension of the collection system is
financed by the mill levy. So long as the cost or value of
the extension is reflected in enhancement of the value of
the property served, this would appear to be equitable
and consistent with EPA guidelines. Should industry be
afforded preferential treatment, by comparison with other
users, in the amount of cost burden levied for main extensions,
it is conceivable that EPA would find this practice in-
consistent with the guidelines unless it is demonstrated
as the most equitable method of allocating costs. On the
other hand, financing of treatment facilities and operations
by mill levies would almost certainly be inconsistent with
the letter and the intent of these guidelines.
The findings of this study do little to support the
application of the SIC classifications to either users
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or user classes, except as perhaps an interim or
transitional measure. Wide variances in waste character-
istics among users of the same class are reported by
wastewater agencies maintaining sampling/monitoring programs
Volume, biochemical oxygen demand (BOD) and suspended
solids (SS) are the typical measures employed as rate
factors in the user charge schedule. In particular
circumstances, in particular localities, dissolved
solids (DS) , chemical oxygen demand (COD) , nutrients and
other parameters (color, pH, deleterious substances, etc.)
may be covered by a rate factor or by standards and pro-
hibitions governing discharges.
Adopting Ordinance
The EPA guidelines require that the user charge schedule
be "incorporated in one or more municipal legislative
enactments or other appropriate authority," or "ordinances"
in conventional terminology. While sanitation districts
may not have been granted authority to enact ordinances
per se, it is believed that their statutory authority
to fix schedules of rates and charges is sufficient to
enable these agencies to do so in a manner to satisfy
the intent of the guidelines.
In the course of the study, several agencies were identified
which fix user charges by negotiated contract with the
individual industry, rather than by ordinance. This
practice should be examined in the light of the guidelines ,
both as to form and to content, to insure compliance.
It should also be examined in the light of state consti-
tutional or legislative mandates that practices be
uniform and equitable among classes.
Of course, no agency is required to enact user charges in
the form specified, unless it desires to be eligible to
receive federal construction grant funds. The guidelines
do require however, that all municipalities or districts
which are part of a regional system must have enacted
such charges for the regional system to become eligible.
The implications of this requirement are discussed elsewhere
in this report.
The adopting ordinance, in addition to the user charge
schedule, should also establish standards and requirements
for waste discharges (See Appendix A for Model Ordinance)
and other features of the agency's industrial waste program.
Operating and Management Plan
It is not believed to be in the overall public interest
or in the interests of effective wastewater management that
the wastewater systems become merely "receivers" of
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wastes, levying such charges as may be appropriate under
circumstances. Rather, it is believed that each agency
should develop an active operating and management plan
or strategy for dealing with its industrial users.
For example, the agency should work with its industrial
users to alleviate peaking conditions, either hydraulic
or chemical, which create added operational costs.
Industries might be prevailed upon to cooperatively agree
to discharge at off-peak times, or on a staggered
schedule, to minimize operational and cost requirements.
Working relationships between the wastewater agency and
the individual industries should be such that changes
in industrial processes or other changes in demands upon
the wastewater system would be made known to the
wastewater agency well in advance so that appropriate
adjustments could be made.
Both the user charge schedule and the operating plan
(as well as the water charge schedule) should encourage
pre-treatment and other reductions in waste volumes
and concentrations with which the wastewater system must
deal. The "know your industry" posture, previously cited,
should facilitate a partnership understanding.
Included with the operating and management plan must be an
orderly, systematic program for the monitoring of industrial
wastes. This program must include physical on-site provisions
for gathering samples, laboratory testing and analysis of
those samples, a realistic schedule for taking samples,
a continuing program of information and data exchange with
industrial users, and some "early warning" mechanism to
avoid disruption or overloading of treatment plant
processes.
Physical provisions may include a requirement for sampling
manholes, and may also include a requirement that the
industry provide holding tanks for temporary deteration and
gradual release of strong wastes. Many agencies vary the
frequency of gathering samples in accordance with the strength
of the wastes; the greater the strength, the greater the
frequency of sampling.
Plan Update
The user charge and industrial cost recovery requirements
of the EPA guidelines stipulate periodic (at,least annual)
update of the user charge schedule to reflect changed
conditions.
Ideally, a continuous review and adjustment would be
accomplished. However, stability in rate structures
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(just as in tax structures) is vital to the economic
stability and well-being of commercial and industrial
users. To avoid widely-fluctuating rate structures
from year to year, the wastewater agency should develop
enlightened capital improvement programs and financial
policies which anticipate outlays in an orderly fashion,
consistent with need but also consistent with revenue
considerations.
Transitional Steps
The smaller agencies, in particular, will find it impractical
to instantly initiate an industrial waste program. Physical
and financial constraints may render this impossible. The
guidelines would appear to anticipate and permit this,
so long as a definite program of implementation is underway.
For example, until physical arrangements have been made for
a sampling program, the wastewater agency might require
that industrial users secure laboratory analyses of their
wastewater from independent contract agencies, using the
lab report as a basis for charges. Alternatively, agencies
might jointly staff and equip the necessary industrial
waste program, or contract with a larger agency for its
performance.
Until accounting classification and cost allocation
procedures have been developed, estimates may have to be
made of the various cost components of the system. Until
individual characteristics of users have been determined,
SIC or other classifications may have to be applied.
Finally, until the program and its impact have been
fully developed, a deferred effective date might be
established. During this period, samplings can be
taken, industries can evaluate and provide pre-treatment
measures, and cost accounting techniques can be perfected.
"Sample" bills might be sent to industrial users during
this period. In other localities, marked reductions in
loadings have been accomplished when deferred dates or
"warning periods" are established. The end result would
appear to be completely consistent with national goals
and with EPA guidelines and regulations.
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SECTION VIII
REGIONAL WASTEWATER AGENCY
Of special concern in the Denver SMSA, particularly in the
instance of Metropolitan Denver Sewage Disposal District
#1, is the effect of the federal regulations and guidelines
upon the eligibility of a regional agency having a
number of subscribers. The guidelines specifically state:
"If a project for which a grant is given is a
regional treatment works accepting wastewaters
from treatment works owned by others, then the
subscribers receiving waste treatment services from
the grantee shall have adopted user charge systems
in accordance with this guideline. -^'
MDSDD #1 has "Connecting Municipalities" as subscribers who
directly discharge waste to MDSDD #1 for treatment and
disposal. The Connecting Municipalities have, or may have,
"Associated Municipalities" who discharge wastes directly
to the system of the Connecting Municipality and, thus,
indirectly to MDSDD #1.
The Sewage Treatment and Disposal Agreement (Service
Contract) for MDSDD #1 provides that each Connecting
Municipality shall be liable for payments, but that no
Associated Municipality shall be liable for the payment
of any charge of the District for sewage treatment, and
disposal; further, that nothing shall prevent the
Connecting Municipality from charging the Associated Muni-
cipality for accepting its wastes. The Service
Contract does not stipulate the form of charges made by
either Connecting Municipalities or Associated Municipalities
to their respective users.
The question thus arises - how can MDSDD #1 (which levies
user charges upon its subscribers and in a form similar to
that required in EPA guidelines) insure its continuing
eligibility for Federal construction grants?
There is no apparent authorization in either the enabling
legislation (Ch. 89, ARt. 15, CRS, as amended), or in the
Service Contract, to permit MDSDD #1 to require of its
direct or indirect subscribers a particular form of
rate structure, or to require the continued adoption of
that structure as a condition to continued service.
Several options are open. The Service Contract might
be amended to include such a stipulation for both Connecting
(direct) and Associated (indirect) municipal subscribers.
Presumably, since the welfare of the District is linked
to the welfare of the subscribers, subscribers would be
receptive to the amendment.
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Should this presumption be invalid, however, the only
effective recourse perceived is that the State enact legis-
lation requiring that all wastewater agencies adopt and
maintain user charges consistent with EPA Regulations
and Guidelines. Undoubtedly, this would create some
adverse reaction among certain municipalities or other
wastewater agencies as unwarranted intervention. This
may, further, be found to be in conflict with the terms or
constraints of revenue bond resolutions by certain districts,
requiring consent of the bond holders.
Granted, however, that by voluntary or by legislative
action a basic system of user charges is adopted by
municipal and district subscribers, how can MDSDD #1
or other regional agencies insure that these charges
remain equitable and current at the time of each
application for grant?
It appears inevitable that, in the interest of their members,
regional agencies will have to maintain some form of
continuous review of cost and revenue structures for all
direct and indirect subscribers. Perhaps, this may afford
an opportunity for improved economy, efficiency and
uniformity through the regional agency performing
accounting, billing and user charge derivation services
for its members. Authority to undertake these additional
services would appear to exist in enabling legislation, and
to require only simple contract negotiations.
Considered opinions suggest that by educational or training
programs, contractual arrangements, or legislative
enactment, regional treatment agencies need to take the
initiative if they are to survive the concurrent onthrust
of increased wastes and federal regulation.
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SECTION IX
ACKNOWLEDGMENTS
The quality and accuracy of a detailed technical study of
this type depends to a large degree on the cooperation and
availability of reliable data from involved agencies. To
this end, response was excellent.
It would be difficult to single out all the individuals who
contributed to this effort. Certainly, special thanks must
be extended to the personnel of the Metropolitan Denver
Sewage Disposal District Number One, particularly Joe
Woodley and Jan Henley; the City and County of Denver
Wastewater Control Division, especially Horace L. Smith and
Bob Gustafson; North Washington Street Water and Sanitation
District, particularly Charles Ciancio and Gwen Forbes;
North Table Mountain Water and Sanitation District,
specifically William Byrne; and the City of Arvada, including
Wayne Adams.
Particular recognition should be extended to Mr. George G.
Collins, Project Director, U.S. Environmental Protection
Agency for his guidance, support and understanding through-
out the study. He and other members of E.P.A. provided
invaluable assistance in the review and critique of
this document.
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SECTION X
REFERENCES
1. Federal Register, Volume 38, Number 161, August 21, 1973,
"Environmental Protection Agency, Grants for Construction
of Treatment Works - User Charges and Industrial Cost
Recovery."
2. City of Arvada and North Table Mountain and North
Washington Street Water and Sanitation Districts.
3. Federal Register, Volume 38, No. 161, August 21, 1973.
4. MDSDD #1 currently has an in-depth study underway to
review the cost allocation percentages to develop more
representative values.
5. Sewer Service in Texas Cities, Texas Municipal League.
This source showed that the base content of "normal
domestic sewage" varied from 200 ppm to 700 ppm for
BOD and 200 ppm to 550 ppm for SS. However, most Texas
agencies used quantities ranging between 250 - 300 ppm.
6. The 467 users represents an annual coverage; 177 in
January increasing to 737 in December.
7. MDSDD #1 currently has an in-depth study underway to
review the cost allocation percentages to develop more
representative values.
8. It may be assumed that most wastewater agencies
(with EPA encouragement) will apply the user charge
principle to individual industrial users in obtaining
industrial cost recovery. Industrial cost recovery
would thus become an extension of the user charge system,
with a fixed amount of total "earmarked" revenue to be
derived.
9. Manual of Practice, Water Pollution Control Federation,
No.40,"Uniform System of Accounts for Wastewater
Utilities."
10. Federal Register, Volume 38, No. 161, August 21, 1973.
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SECTION XI
BIBLIOGRAPHY
American Public Works Association, American Society of Civil
Engineers, Water Pollution Control Federation,
Financing Charges for Wastewater Systems, 1973.
American Public Works Association, Industrial - _Waste_
Regulations and Surcharges, 1971.
American Society of Civil Engineers, Section of Municipal
Law of the American Bar Association, et al., Fundamental
Considerations in Rates and Rate Structures for Water
and Sewage Works, 1951.
Arvada, City of, Annual Budget and Program of Services, 1972.
Arvada, City of, "Sewer Service Charges," September, 1972.
Classen, Nicholas W., P.E. and Harry D. Voigt, "The Cost
of Wastewater System Facilities," Public Works, May,
1973.
Colorado Interstate Gas Company, Colorado Industrial
Capability Register, 1970.
Colorado Municipal League, Municipal Sewer Service in Colorado,
1963.
Denver, City and County of, Department of Public Works,
Article 167, Rules and Regulations Governing Sanitary
Sewage Charges and Control of Wastewater.
Denver, City and County of, Wastewater Control Division,
"Industrial Waste Accounts, Classifications and
Loadings," July, 1970 to June, 1971, and July, 1971
to June, 1972.
Environmental Law Institute, Effluent Charges on Air and Water
Pollution, 1973.
Environmental Protection Agency, Alternative Financing
Methods for Clean Water, 1971.
Environmental Protection Agency, Cost Effectiveness in Water
Quality Programs, 1972.
Environmental Protection Agemcy, Equitable Recovery of
Industrial Waste Treatment Costs in Municipal Systems,
October, 1971.
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Environmental Protection Agency, Financial and Institutional^
Arrangements for Wastewater Management, by Wilbur
Smith and Associates, April, 1973.
Environmental Protection Agency, National Capital Region
Water and Waste Management Report, April, 1971.
Environmental Protection Agency, The Economies of Clean,
Water, January, 1972.
Federal Register, Grants for Construction of Treatment Works,
User Charges and Industrial Cost Recovery, Volume 38
Number 161, August 21, 1973.
Hyde, J. R., "Inaugurating an Industrial Waste Program,"
Public Works, March, 1972.
Management and Budget, Office of, Office of the President,
Standard and Industrial Classification Manual, 1972.
Metropolitan Denver Sewage Disposal District, Number 1,
Annual Budget, 1972.
MDSDD tl, Annual Budget, 1973.
MDSDD #1, Annual Budget, 1974.
MDSDD #1, Annual Report, 1972.
MDSDD #1, "1972 Loadings and Annual Charges, Final Adjustments."
MDSDD #1, Sewage Treatment and Disposal Agreement (Service
Contract), January 1, 1964.
North Table Mountain Water and Sanitation District, Annual
Audit Report, by Kennedy and Lesan, C.P.A., November, 1972.
North Table Mountain Water and Sanitation District, Report
on Sewage Treatment Charges by MDSDD #1 for the Year
1972, by Rea, Cassens and Associates, Inc., May, 1973.
North Table Mountain Water and Sanitation District, "Sewer
Tap Application and Agreement."
North Washington Street Water and Sanitation District,
Financial Statements and Accountants' Report,
by Clifton, Gunderson and Co., C.P.A., November, 1972.
North Washington Street Water and Sanitation District,
Rules, Regulations and Rate Schedules for Water and
Sewer Service, and Amendments, May,1970.
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Ritter, L.E., and P.A. Podolick, "Determining an Equitable
Surcharge for Industrial Wastes," Public Works,
July, 1973.
South Carolina Water Pollution Control Division, Pollution
Control Authority, Guidelines for Unit Contributory
Loadings to Wastewater Treatment Facilities, 1972.
State Auditory, Office of, Colorado Local Government
Accounting, Auditing and Reporting Laws, 1968.
Tenner, Irving, Financial Administration of Municipal Utilities^
Public Administration Service, 1947.
Texas Municipal League, Sewer Service in Texas Cities.
U. S. Congress, Federal Water Pollution Control Act Amendments
of 1972.
Verlander, F. Michael, and Hoag, Lyle N., "Sewerage: Who
Should Pay?"f Water and Wastes Engineering, April, 1973.
Virginia Municipal League, Sewer Charges in Virginia Cities,
Report No. 493, June, 1968.
Water Pollution Control Federation, "Uniform System of
Accounts for Wastewater Utilities," Manual of Practice
Number 40.
Water Resources Research Institute, University of North
Carolina, Surcharges for Industrial Wastes; Suggestion
and Guidelines, 1972.
White, Raymond D., "Determining Utility Rates for Commercial
Users," Public Works, May, 1973.
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SECTION XII
GLOSSARY
BOD - Biochemical Oxygen Demand, expressed in ppm or tons.
Construction - Any one or more of the following: preliminary
planning_to determine the feasibility of treatment works,
engineering, architectural, legal, fiscal, or economic
investigations or studies, surveys, designs, plans,
working drawings, specifications, procedures, or other
necessary actions, erection, buildings, acquisition, alter-
ation, remodeling, improvement, or extension of treatment
works, or the inspection or supervision of any of the
foregoing items.
DRCQG - Denver Regional Council of Governments.
EPA - U. S. Environmental Protection Agency
Federal Share - Seventy-five percent of the project cost.
Flow - Amount of sewage directed into or through a system,
in gallons.
GPY - Gallons per year.
Industrial Share - That portion of the project cost
incurred in constructing publicly owned treatment works
allocable to treatment of wastes from industrial users.
Industrial User - Any nongovernmental user of publicly owned
treatment works identified in the SIC Manual, 1972 under
the following divisions; A,B,D,E, & I if wastes contributed
to the system exceed levels for "normal domestic sewage."
Loadings (or system loadings) - Characteristics and components
of sewage discharge, usually referring to levels of BOD and SS
MDSDD #1 - Metropolitan Denver Sewage Disposal District
Number 1.
mg - Millions of gallons.
Normal Domestic Sewage - Appropriate or representative
parameters for levels of flow, BOD and SS flowing from
residential sewer taps. In fact, these levels vary from
area to area and district to district. Therefore, what
is "normal" for one instance may not be "normal" in another.
NTMD - North Table Mountain. Water and Sanitation District.
NWSWSSD - North Washington Street Water and Sanitation
District
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Parameter - Assigned level of flow, BOD or SS based on
general average of sampled user classes with similar sewage
characteristics.
Plant Investment Fee - Charge levied to users by wastewater
agencies to provide for eventual replacement of treatment
works.
Pollutant - Dredged spoil, solid waste, incinerator residue,
sewage, garbage, sewage sludge, munitions, chemical wastes,
biological materials, radioactive materials, heat, wrecked
or discarded equipment, rock, sand, cellar dirt, and
industrial, municipal, and agricultural waste discharged
into water.
ppm - Parts per million
ppm to tons (formula) - Tons = concentration in parts per
million x 8.345 pounds per million gallons x total flow (mg)
2,000 pounds per ton.
Project Cost - The cost of construction of publicly owned
treatment works as defined in Regulation 40 CFR 35.905-10.
Recovery Period - That period during which that portion of
the Federal share attributable to the treatment of industrial
wastes is recovered from industrial users.
SIC - Standard Industrial Classification (SIC Manual,
1972, Office of Management and Budget)
SMSA - Standard Metropolitan Statistical Area
SS - Suspended solids, expressed in ppm or tons.
Treatment Works - Any devices and systems used in the storage,
treatment, recycling, and reclamation of municipal sewage
or industrial wastes of a liquid nature, including inter-
cepting sewers, outfall sewers, sewage collection systems,
pumping, power, and other equipment, and their appurtenances;
extensions, improvements, remodeling, additions, and alter-
ations thereof; and any works, including site acquisition
of the land that will be an integral part of the treatment
process or is used for ultimate disposal of residues
resulting from such treatment. In addition, treatment works
means any other method or system for preventing, abating,
reducing, storing, treating, separating, or disposing of
municipal waste, including storm water runoff, or industrial
waste, including waste in combined storm water and sanitary
sewer systems.
Unit Costs -* The cost of collection, treatment, and/or
disposal of wastewater discharge per unit (pound/ton, gallon/
thousand gallons/million gallons) of flow, BOD and SS.
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User - An individual subscriber (industry, warehouse,
hospital, home, business, etc.) contributing effluent to the
sewer system.
User Charge '- Charges levied by wastewater agencies_to users
to cover operating and maintenance costs in proportion to total
treatment works loading.
User Class - A group, or category, of users having similar
sewage flow and content characteristics.
Wastewater Agency - A public agency, either a municipality
or district, established for the purpose of collecting and/or
treating and disposing of wastewater discharge.
WSSA - Wilbur Smith and Associates
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APPENDIX A
MODEL ORDINANCE (RESOLUTION)
AN ORDINANCE (RESOLUTION) TO REGULATE, 'RESTRICT, AND LIMIT,
IN THE INTEREST OF THE PUBLIC HEALTH AND SAFETY, THE DEPOSIT
OR DISCHARGE OF CERTAIN SUBSTANCES INTO ANY SANITARY SEWER
NOW MAINTAINED AND/OR OWNED BY OR WHICH MAY BECOME THE
PROPERTY OF THE (CITY) (TOWN) (DISTRICT) OF .
. BE IT ORDAINED BY THE BOARD OF
OF THE (CITY) (TOWN) (DISTRICT)
OF AS FOLLOWS:
Section 1: DEFINITIONS
1. Sanitary Sewer is a sewer intended to receive
domestic sewage and industrial waste, except that of the
type expressly prohibited by this ordinance, without the
admixture of surface water and storm water.
2. Domestic Sewage is that liquid waste from bath
rooms, toilet rooms, kitchens and home laundries.
3. Industrial Wastes are the liquid wastes, other
than domestic sewage, resulting from processes or operations
employed in industrial establishments.
^* "B.0.D." (Denoting Biochemical Oxygen Demand)
shall mean the quantity of oxygen utilized in the biochemical
oxidation of organic matter under standard laboratory
procedure in 5 days at 20 C, expressed in parts per million
by weight.
4. "Properly Shredded Garbage" shall mean the wastes
from the preparation, cooling, and dispensing of food
that have been shredded to such degree that all particles
will be carried freely under the flow conditions normally
prevailing in public sewers, with no particle greater than
1/2 inch in any dimension.
6. "Suspended Solids" shall mean solids that either
float on the surface of, or are in suspension in water,
sewage, or other liquids; and which are removable by
laboratory filtering.
7. "pH" shall mean the logarithm of the reciprocal
of the concentration of hydrogen ions in grams per liter of
solution. A stabilized pH will be considered as a pH
which does not change beyond the specified limits when the
waste is subjected to aeration. A pH value indicates the
degree of acidity or alkalinity.
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8' Color is the "true color" due to the substances
in solution expressed in wave lengths of light.
9. Person, is any individual, firm, company, association
or corporat ionT
10. (City) (Town) ('District) is the (City) (Town)
(District) of .
11. Receiving Stream is that body of water, stream
or water course receiving the discharge waters from the
sewage treatment plant or formed by the waters discharged
from the sewage treatment plant.
12. Approving Authority shall be the
(as designated by the governing body).
13. "Shall" is mandatory; "_May"_ is permissive.
Section II: USAGE OF MUNICIPAL (DISTRICT) SANITARY
SEWERS
1. No person shall discharge or deposit any of the
following waste materials into any (City) (Town) (District)
sewer:
(a) Any liquid or vapor having a temperature higher
than .
(b) Any water or waste which may contain more than
parts per million, by weight, of fat, oil, or
grease, exclusive of soap.
(c) Any flammable or explosive liquid, solid or
gas, including, but not limited to gasoline, benzene,
naptha, and fuel oil.
(d) Any garbage that has not been properly shredded.
(e) Any ashes, cinders, sand, mud, straw, shavings,
metal, glass, rags, feathers, tar, plastics, wood, paunch
manure, or other solid or viscous substance capable of
causing obstruction to the flow in sewers or other inter-
ference with the proper operation of the sewage works.
(f) Any waters or wastes having a stabilized pH
lower than or higher than , or
having any other corrosive property capable of causing
damage or hazard to structures, equipment, and personnel
of the sewer works.
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(g) Any waters or wastes having a Biochemical
Oxygen Demand in excess of parts per
million (mg./I).
(h) Any waters or wastes containing more than
parts per million by weight or suspended
solids.
(i) Any concentration of Chloride higher than
(j) Any wastes or waters having an objectional
color which is not removable in the existing sewage treat-
ment plant processes.
(k) Any waters or wastes containing a toxic or
poisonous substance or any other materials in sufficient
quantity to injure or interfere with any sewage treatment
process, or constitute a hazard to humans or animals, or
create any hazard in the receiving stream at the sewage
treatment plant.
(1) Any waters or wastes containing suspended
solids of such character and quantity that unusual attention
or expense is required to handle such materials at the
average sewage treatment plant.
(m) Any noxious or malodorous gas or substance
capable of creating a public nuisance.
2. The Approving Authority, without limitation by
other sections of this ordinance, may authorize any person
to discharge industrial waste of unusual strength or
character into the sewers of the _ ^___
under approved conditions or pretreatment.The Approving
Authority may prohibit entry of particular industrial wastes
into the sanitary sewer whenever such action is necessary to
prevent damage to the system or to determine the effects of
such wastes on the sewage system.
Section III: STRUCTURES REQUIRED
1. Storage Tanks: In order to equalize flows over
a 24-hour period, each person discharging a waste into the
(City) (Town) (District) sanitary sewers having a volume
in excess of _ ^___^ gallons in any
one day, shall construct and maintain at his own expense a
suitable storage tank. Said tank shall have a capacity of
at least 80% of the normal volume of one 24-hour production
period of waste and whose outlet to the sewer is controlled
by a water works type rate controller, or other approved
devices, the setting of which shall be directed by the
Approving Authority.
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2. Any person discharging industrial wastes into
(City) (Town) (District) Sanitary Sewer shall construct and
maintain a suitable control manhole, down stream from any
treatment, storage, or other approved works, to facilitate
observation, measurements and sampling of all wastes including
domestic sewage, from the industry. The control manhole
shall be constructed at a suitable and satisfactory location
and built in a manner approved by the Approving Authority.
Where a storage tank is not required, the control manhole
shall be equipped with a permanent type volume measuring
device such as a nozzle, or other suitable devices as may
be approved by the Approving Authority. The manhole shall
be maintained by him so as to be safe, accessible and in
proper operating condition at all times.
3. Plans for the construction of said storage tank,
control manhole, and controlling devices shall be approved
by the Approving Authority prior to the beginning of
construction.
Section IV: PERMITS
Any person desiring to deposit or discharge, or who
is now depositing or discharging any industrial waste into
the sanitary sewers shall make application for the disposal
of industrial waste to the Superintendent of the .(Water)
and (Sewer) Department. The Superintendent of the (Water)
and (Sewer) Department shall approve such applications only
when evidence is submitted by the applicant that the
discharge into the sanitary sewer will comply with all of the
regulations of this ordinance.
Section V: OUTSIDE CONNECTIONS
Any person owning or controlling premises located
beyond the corporate limits of the (City) (Town) (District)
of an(3 desiring to install
a plumbing system for the purpose of discharging domestic
sewage and/or industrial waste into the sanitary sewers of
the (City) (Town) (District) of ^
may do so by complying with the requirements of this or-
dinance and by paying an additional permit fee and a
yearly sewer rental charge to be fixed by the Board of
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Section VI: POWERS AND AUTHORITY FOR INSPECTION
The Approving Authority and other duly authorized
employees of the (City) (Town) ( District) bearing proper
credentials and identifications, shall be permitted to
enter upon all properties for the purpose of inspection,
observation, measurement, sampling, and testing, in
accordance with the provisions of this ordinance.
Section VII: MEASUREMENT OF FLOW
1. The volume of flow used in computing waste
surcharges shall be based upon metered water consumption
as shown in the records of meter reading maintained by the
(City) (Town) (District) Water Department. In the event
that a person discharging wastes into the sanitary sewer
system produces evidence to the Approving Authority that
part'-'-' of his water used does not reach the (City) (Town)
(District) sanitary sewer, the user may apply to the
Approving Authority for a reduced percentage of total
water consumption to be used in computing sewer charges.
Where the person discharging industrial wastes into the
sanitary sewers of the (City) (Town) (District) of
, all or part of which is dis-
charged into the sanitary sewer, the person discharging said
waste shall install and maintain, at his expense, water
meters of a type approved by the Approving Authority for
the purpose of determining the proper volume of flow
being charged. The Approving Authority has a right tp
read such private meters.
Section VIII: DETERMINING OF CHARACTER AND CONCENTRATION
OF WASTES
1. The Approving Authority or an assistant designated
by it shall make a periodic determination of character and
concentration of wastes as may be deemed necessary by the
Approving Authority.
2. Location and design of sampling sites should
be approved by the Approving Authority.
3. Samples shall be collected in such a manner
'This might be done only if the user presents evidence
that more than a certain percent of his water is
involved, (i.e., 10 percent).
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as to be satisfactory to the Approving Authority. The
laboratory methods used in the examination of said waste-
waters shall be in accordance with Federal guidelines
establishing test procedures as set forth in the Federal
Register, Volume 38, No. 199, dated October 16, 1973.
Section XI: PROTECTION FROM DAMAGES
It shall be considered a misdemeanor to maliciously,
willfully or negligently break, damage, destroy, uncover,
deface or tamper with any equipment or materials belonging
to the (City) (Town) (District) of _
used for the purpose of making tests or examinations and
left upon the premises of a person discharging wastes into
the sewers.
Section XII: REPEALING CLAUSE
All ordinances (resolutions) or parts of ordinances
(resolutions) in conflict with this ordinance are hereby
repealed. If any section, paragraph, subdivision, clause
or provision of this ordinance shall be adjudged invalid,
such adjudication shall apply only to such section,
paragraph, subdivision, clause or provision so adjudged,
and the remainder of this ordinance shall be deemed valid and
effective.
Section XIII: EFFECTIVE DATE
This ordinance (resolution) shall take effect and
be in full force from and after the
day of , 19 .
ATTEST:
(Mayor)
(City) (Town) (District) Clerk
APPROVED AS TO FORM:
(City)(Town)(District) Clerk
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U.S. GOVERNMENT PRINTING OFFICE: 1974 _ 780-869 / 83 REGION NO. 8
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