Wastewater rates could nearly double by 2017

As members of a wastewater task force narrow possible scenarios for sanitary sewer rate hikes to address increased regulation and an aging collection system, city officials are seeking public input on improvements that could cost $50 million.

The favored proposal would bring the average monthly residential wastewater fee to $28.06 by fiscal 2017, up from the current monthly average of $15.46, according to a Springfield Public Works report provided to Springfield Business Journal. The report outlines five revenue adjustment scenarios.

Pending City Council approval of the favored scenario, the first residential increase of $4.02 per month would go into effect in fiscal 2012, which begins July 1. In fiscal 2013, the increase would grow to $5.45 per month, with increases of less than $1 in each subsequent year through 2017.

Commercial wastewater rates in the same favored proposal would grow by $25.22 starting July 1 and by $34.23 in fiscal 2013, with four more annual jumps in the $5 range. The rate adjustments would bring the average commercial wastewater monthly bill to $176.09 in fiscal 2017 from $97.02 currently.

A stakeholders’ meeting to discuss rate increases is scheduled for 4 p.m. Feb. 15 at the city’s sanitary services building, 1216 W. Nichols St.

Ed Malter, co-interim assistant director in Public Works’ environmental services division, said the 25-member task force should recommend a rate increase to City Council by mid-April, and it wants to be forthcoming with citizens about the need as well as answer questions.

“A big part of what we’ve tried to do is pull together the community and make sure it is tracking information on the process,” Malter said.

According to task force co-Chairman Ken McClure, the group has held five meetings since
September to address a widening gap between wastewater expenditures and revenues.

Malter said wastewater fund reserves have reached $30 million in recent years, but the balance is projected to be $8 million by the end of June, primarily due to reduced water usage.

Steve Meyer, co-interim assistant director of Public Works’ environmental services, said conservation efforts, as well as company closings have had an impact on revenues. Willow Brook Foods, which closed its Springfield operations in March 2008, had produced roughly $1.2 million in revenue for the fund annually, according to Meyer.

Public Works officials are trying to return the balance to around $20 million by fiscal 2017. The task force’s favored proposal would bring the balance to $19.65 million in six years.
Under existing rates, the wastewater fund would record a $12.8 million operating loss by 2017, according to the Public Works report.

In July, Public Works’ officials met with council members to discuss upgrades mandated by the Environmental Protection Agency and the Missouri Department of Natural Resources to prevent sanitary system overflows, which are prohibited under the Clean Air Act of 1972. The wastewater task force, comprising public officials and ratepayers, was then established to determine how to fairly divide the costs of improvements to sewer users.

According to Malter, the city is negotiating a consent decree with regulators to head off any legal action resulting from a discovery of system overflows in the city.[[In-content Ad]]