Council to consider wastewater hikes

After eight months of meetings, members of the Wastewater Task Force recommended Springfield City Council implement quick jumps in rates during the next two years, followed by smaller increases for all customers through fiscal 2017 to fund $50 million in system improvements. The result would nearly double residential and commercial customer bills during the next six years.

With council approval, residential and commercial wastewater charges would climb roughly 30 percent in each of the next two fiscal years, followed by roughly 4 percent hikes during the next four years to cover system upgrades.

Sally Hargis, vice president of Ozarks Coca Cola/Dr Pepper Bottling Co., said she represented six industrial customers who face thousands of dollars in monthly wastewater cost increases, and they wanted time to work out a solution that would smooth over the most dramatic hikes.

According to the city, Kraft Foods Inc. currently pays about $115,000 per month. The proposal jumps Kraft's charges to $134,000 at the start of fiscal 2012 in July and to $216,000 at the end of the increase period. Hargis said her company would see an increase of 36 percent in wastewater charges in the first year alone.

“We are not looking for a way out of paying our fair share, but we want the city to consider the severe impact this will have in the next two years,” Hargis told council.

Steve Meyer, assistant director of Public Works’ environmental services, said new rate revenues would fund federal infrastructure requirements under the Clean Water Act. The improvements would be paid by bonds, and the debt service on those bonds would be paid by the proposed rate increases, according to Meyer.

Meyer said some $130 million in upgrades had been made to the wastewater system during the last 15 years, but more improvements are needed to prevent sanitary system overflows, which are not permitted under federal law. Another issue facing Public Works is the dwindling fund balance, which is now at roughly $8 million, down from $30 million before the recession.

Under the proposal, which goes to council vote May 31, residential customers would see their rates climb to $28.07 in fiscal 2017 from $15.46 currently. Commercial customers, who currently pay an average of $97.06, would see bills of $122.24 starting in July, $156.47 the next year and $176.09 in fiscal 2017.

City Manager Greg Burris said sewer rates been held constant in recent years even as overall usage dropped, causing the fund balance to dwindle. Burris said Hargis and other industrial customers could engage in talks with the Springfield Area Chamber of Commerce and city officials during the next two weeks to see if a smoother rate transition could be made for those customers.

“If there’s a lesson to be learned here, it’s that smaller increase on a regular basis are a better option,” Burris said.

Hargis said if the increases in the first two years were implemented, the company could determine to move some of its production services to another location.

Public debate on the bill will be continued at the next meeting, scheduled a day after Memorial Day.

For more on the May 16 Springfield City Council meeting, look to the May 23 Springfield Business Journal print edition.[[In-content Ad]]