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The Monroe Apartments on the campus of Missouri State University is located within an area declared blighted in 1966.
The Monroe Apartments on the campus of Missouri State University is located within an area declared blighted in 1966.

Industrial users seek even ground in wastewater rate plan

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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 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 monthly 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 Ozarks Coca-Cola 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 infrastructure improvements to handle federal discharge requirements under the Clean Water Act.

The upgrades 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 improvements had been made to the wastewater system during the last 15 years, but more 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 roughly $97.06, would see average bills of $122.24 starting in July, $156.47 the next year and $176.09 in fiscal 2017.

All base charges for residential and commercial customers would be the same under the proposal, but commercial clients, which tend to dispose of more water, typically have comparatively high usage charges. In addition to base customer and usage fees, the task force also recommended that 800 food-service customers see a $16 per month increase for food, oil and grease treatments. Those charges have historically been spread out among all nonresidential customers.

Also, 71 industrial customers would absorb the cost of pretreatment and survey services, which will increase their bills by an average of $434 per month.

Of those 71 companies, 16 would be subject to a high-strength surcharge due to the necessary treatment of two common pollutants: biochemical oxygen demand and total suspended solids. The adjustment was recommended due to the task force’s consensus that bills should be fair and equitable, and reflect the services being used. Those commercial customers that won’t face the pretreatment or pollutant charges will see their monthly bill decrease by $4.42 per month, even as their overall bill is rising.

Biochemical oxygen demand charges will climb from roughly 25 cents per pound now to 36 cents in fiscal 2016. TSS rates will jump from 9 cents per pound to 13 cents in 2016.

City Manager Greg Burris said sewer rates have 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 increases 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 choose to move some of its production services to another location outside the city.

Calling the approach practical and prudent, task force member Mike Pessina, a senior project manager at HDR Engineering, said the city has handled the cost adjustments well by asking business, environmental and community leaders to serve on the 25-member task force.

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

Monroe redevelopment

United Campus Housing LLC received unanimous council approval to apply for tax abatements on Missouri State University campus property where it’s building The Monroe Apartments.

The developers recently learned the nearly one-acre property at Florence Avenue and Monroe Street was declared blighted in 1966, said Husch Blackwell LLP attorney Shawn Whitney, who’s represented United Campus Housing.

Under Missouri statutes, developers of property in areas that have been declared blighted are eligible to receive tax abatements.

“They can take their project to the Land Clearance for Redevelopment Authority and if the LCRA finds it’s consistent with the redevelopment plan that council adopted, then they would receive 100 percent abatement on taxes on new improvements for a period of 10 years,” said Mary Lilly Smith, Springfield economic development director.

The four-story, 122-unit complex, under management of Matt Miller of Miller O’Reilly Construction Inc., is nearing completion.

The Monroe, which is designed to achieve Leadership in Energy and Environmental Design certification, will offer student housing and house the headquarters of United Ministries in Higher Education.[[In-content Ad]]


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