Budget and Rates

LOTT's Budget is comprised of two main components: Capital Budget and Operating Budget. The Operating Budget contains all costs necessary to operate LOTT's various facilities and administrative functions. It is funded primarily by monthly service rates. The Capital Budget includes costs necessary to construct new facilities and upgrade, replace, and rehabilitate existing facilities. These projects are developed and scheduled on LOTT's Capital Improvements Plan (CIP). Projects related to existing facilities are funded through monthly service rates and projects related to new capacity are funded through connection fees. The Budget and Capital Improvements Plan are reviewed and updated annually. The monthly service rates and connection fees are evaluated and adjusted annually as part of the budget process.

2012 Budget and capital improvements plan

The 2012 Operating and Capital Budgets and CIP were approved by the LOTT Board of Directors at their November 9 Business meeting. LOTT's Capital Improvements Plan (CIP) accounts for short- and long-term facilities needs. The CIP identifies $122 million in projects anticipated through 2018. The 2012 Capital Budget is about 32% of the total CIP, at $39.1 million. Work on the Primary Sedimentation Basins project, the largest capital project on the 2012-2018 CIP, represents 75% of the 2012 Capital Budget. Other large capital projects continuing or underway in 2012 include construction of the new East Bay Public Plaza, the Martin Way Reclaimed Water Plant Membrane Upgrade, and a Reclaimed Water Storage and Pumping project in Tumwater.

The 2012 Operating Budget includes $16.2 million for expenses associated with LOTT's operations and debt service. This figure is down slightly from 2011, which projected expenses of $16.5 million for operations and debt service.

Rate Increase for 2012

Each year, the LOTT Board of Directors sets monthly service rates and connection fees for the coming year. The interlocal agreement between LOTT and its partner jurisdictions requires that the partner jurisdictions be notified of LOTT's rates by August 31 of each year. To support the rate setting process, LOTT started the budgeting process earlier this year, developing a preliminary budget proposal for 2012 in June. The preliminary 2012 Operating Budget, Capital Budget, and Capital Improvements Plan were discussed by the Board of Directors at their June, July, and August Board meetings.

The preliminary 2012 Operating Budget, Capital Budget, and Capital Improvements Plan include an increase in both the monthly service rate and the connection fee, referred to as the Capacity Development Charge. After careful consideration, the LOTT Board of Directors approved these rate increases at their August 10 Board meeting. The monthly rate will be increased from the current rate of $31.50 per month to $33.00 per month. This rate increase is needed to support major capital projects required to sustain the Budd Inlet Treatment Plant, the heart of the regional wastewater system. The connection fee, or CDC, will increase from the current rate of $4,305.10 to $4,519.20, to support large-scale capital projects needed to expand treatment capacity. These increases are part of a 5-year rate plan that was approved by the Board in 2007. More information about the rate increases is available by clicking on the fact sheet thumbnail.