Rate Setting Information
American Bottoms is a not for profit organization that provides
wastewater treatment services to residential, commercial, and
industrial customers in Alorton, Village of Cahokia, Centreville,
Commonfields of Cahokia Water District, East St. Louis, and Village
of Sauget. To ensure the continued operation of American
Bottoms, payments received must be sufficient to meet annual
Revenue for American Bottoms comes from residential payments,
industrial payments, prior year accounts receivable collected,
pretreatment program revenue, surcharge revenue, miscellaneous
income, and investment income. Customers that do not pay are
subtracted from the total revenue collected (this is referred to as
Industrial payments are based on a user charge.
User charges are calculated by applying our rate to customer's
water usage. Residential customer wastewater volumes are
based on metered water usage provided by Illinois American,
Commonfields and Village of Cahokia. Most industrial customer
wastewater volumes are metered directly by American Bottoms.
Prior Year's Accounts
Payments received from past due accounts for prior years are
important to help American Bottoms meet its expenses and to help
avoid further rate increases.
This program was set up for permitted industrial customers to
directly recover pretreatment expenses.
Some industrial customers are charged an additional charge for the
treatment of extra strength wastewater.
Miscellaneous income consists of miscellaneous fees, charges and
hauled wastewater revenue.
Investment income is based on interest from American Bottoms cash
investments, which is about 1.5 percent.
Bad debt is simply when a customer does not pay their bill.
Bad debt collection has reduced from 14% in 2009 to approximately
2.5% in 2010 due largely to the water shut off program.
Revenue Requirements Analysis
O&M expenses include the cost of employee wages and benefits,
equipment used, and materials needed to treat wastewater and
operate the facility on a routine basis. An Operations and
Maintenance Budget is provided to the Board of Directors for
approval each fiscal year. The budget also includes
pretreatment program expenses, which are recovered directly from
Debt service consists of scheduled principal and interest payments
made to the Illinois Environmental Protection Agency (IEPA) for
loans made to American Bottoms for plant improvements.
Repayment of these loans will be completed in FY 2013 and FY 2015
Cash Flow Analysis
American Bottoms takes a look at its end of the year bank
balance and the projected revenue and expenses for the upcoming
year. This information is used to help determine the
By looking at where the money will come from and how it will be
spent, American Bottoms can make a determination on what the rate
will be for the following fiscal year.