MOUNT VERNON — In a lengthy Utilities Committee discussion, Mount Vernon City Council members continued the debate on raising wastewater fees.
The city’s Utilities Commission has recommended a 15% increase for years 2021, 2022, and 2023, and a 10% increase for years 2024-30. The current rate is $19.60 a month for the minimum rate of 400 cubic feet usage. A 15% increase equals an additional $2.96, $3.36, and $3.88 a month for 2021-23.
Administration officials and commission members cited increased operational costs, the need to replace aging infrastructure (including the city’s two digestors), and EPA-mandated projects (phosphorus treatment and Clinton Road pump station) as the reasons for increasing the fees.
Regarding operational costs, City Engineer Brian Ball said the city is “fighting the battle of the bulge.”
“Of the $3 million we bring in [in wastewater revenue], $1 million goes to paying off debt, and $2 million to operating the wastewater utility. We don’t know what the phosphorus treatment will do, but we do know that we will be buying [more] chemicals,” he said.
In 2019, 37% of revenue went toward wages and benefits, 16% to capital improvements, 28% to debt, 7% each for operational expenses and utilities and chemicals, and 3% for contracted services. Two percent will be carried over to 2021.
Ball said that even with the proposed annual rate increases, there will not be enough money in 2025 to cover expenses. The projected cost of capital improvements in 2025 is 73% of revenue. However, in order to cover the other wastewater expenses, the city will have to hold capital improvements to 35% of revenue.
He also said that upcoming improvement projects are difficult to push forward without avoiding additional breakdowns and EPA compliance fines. The EPA requires the city to finish two projects, the phosphorus treatment and fixing the Clinton Road pump station SSO (sanitary sewer overflow), by 2024. Estimated costs are $5 million and upward of $3.1 million, respectively. (Of the $3.1 million for the pump station, about $639,000 is allocated to wastewater costs.)
Historically, the city has taken on long-term debt for infrastructure projects, currently owing $8.441 million on five bonds. One bond ends in December 2022. Two end in 2027, one in 2029, and one in 2032.
2023 and 2024 are the last dates to complete the EPA-mandated projects. Because four bonds are still in place when the EPA time frame expires, Ball said the city cannot fund both EPA projects through debt, and the rate increases will help with funding.
Ball noted that when considering budgets, bonds, and projects, three things are important: time, cost, and quality.
“When you run out of time due to mandates, you have to let go of cost or quality,” he said. “We don’t want to sacrifice quality because we’ll have to replace things, so the sooner we act in time, the better quality and lower cost of the project we are going to get.”
The city increased wastewater fees in 2010, 2011, and 2012. The last increase was in 2017.
The proposed ordinance calls for future increases to be automatic, with council reviewing the rates at least every three years.
“We can’t afford to let our rate increases fall off a cliff,” said Safety-service Director Richard Dzik. “We did a good job setting rates higher, and then we stopped.”
Councilman Tanner Salyers said he understands the need for higher fees but also recognizes that for residents, water, wastewater and storm water fees all appear on the same bill.
“If we had instituted a 3% increase 20 years ago, we probably would not be in this situation,” he said. “At some point we have to reset. But I understand it’s difficult for our users.”
Council member Tammy Woods pointed out that the 42% increase in 2017 was so high because of the cumulative effect of not doing anything for so many years. Council President Bruce Hawkins agreed that increases need to be in “increments that we can live with … rather than having a huge increase like we did several years ago.”
Current code requires the director of public works to bring potential rate increases before council each year. In light of that requirement, Salyers questioned the need for an automatic increase.
“Because we’ve gone three years without increasing [fees],” responded Council member Samantha Scoles. “I’m comfortable with it being in there.”
Dzik said that although the city has not seen new development and thus new users, the idea of revisiting the fees every three years offers the city the chance to adjust if new users come on board.
When questioned about water rates, Dzik said the city will not raise rates in 2021. He did say that the city will do an assessment of water fees next year similar to the assessment of wastewater rates the city did this year.
In addition to wastewater rate increases, the Utilities Commission also recommended eliminating the $1 discount for seniors on their water and wastewater bills. Before giving the rate increase ordinance its second reading in its legislative session, council amended the wording and left the discount intact.
The ordinance now deals solely with wastewater rates. If council approves the legislation at its Dec. 28 meeting, it will take effect Jan. 1, 2021. January bills will reflect December usage; February bills will reflect the new fee.
Council will hold another committee meeting on Dec. 28.
