The overhaul of Bend utility rates later this year could eliminate the long-term subsidy that some local businesses have received at the expense of households and offices that send less water into city sewers.

Residents currently pay a set amount — $46 a month — for sewer service. Discussions of potential changes to sewer rates in recent years focused on more accurately allocating costs among businesses, with no proposed change to the existing split of sewer charges between residential and commercial sewer customers. In the budget year that ended June 30, the city received $13.4 million from residential sewer customers and $4.7 million from commercial customers, Interim Finance Director Sharon Wojda wrote in an email Wednesday. Residential water customers paid the city $10.3 million, and commercial water accounts paid $5.7 million. That means residents pay approximately 64 percent of water costs and 74 percent of sewer costs.

Carolyn Eagan, the city’s business advocate, said Thursday that city officials will discuss this fall whether to change how the city allocates sewer costs among residential accounts and other customers, as well as discuss disparities among businesses. Eagan said that, based on the city’s analysis of 2013 sewer data, nonresidential customers might have received as much as a $2 million subsidy. However, a consultant for the city needs to do more work with a mathematical model to determine how costs should be reallocated; the savings might ultimately go to households and low-impact businesses such as offices.

Examples of businesses that discharge higher levels of waste into city sewers and that might face higher costs under a new sewer rate structure include hospitals, restaurants, grocery stores, breweries and auto repair shops.

Matt Thomas, co-owner of Subaru of Bend, is a member of a citizen committee that advised the city on how to reallocate sewer costs among businesses. Thomas said that because the existing sewer rate structure relies upon residential customers and offices to subsidize other business customers, the city “definitely needed to fix it.”

Thomas said Subaru of Bend was one of a dozen Bend businesses, including Deschutes Brewery, that has paid higher sewer rates since the 1980s because the city identified them as producing more polluted wastewater. However, the program was never expanded to include the increasing number of businesses — including such as hospitals, restaurants, grocery stores, breweries and auto repair shops — that sent more waste into the sewers.

“Now we need to make sure the rest of the business owners are paying their fair share,” Thomas said Thursday.

— Reporter: 541-617-7829, hborrud@bendbulletin.com