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Paying for the new sewer plant

22 percent hike in water, sewer rates may be on tap this year

Published: Monday, June 17, 2013 1:15 a.m. CDT • Updated: Monday, June 17, 2013 12:29 p.m. CDT

MORRISON – City sewer and water rates likely will more than double over the next 11 years to pay for a new $23 million wastewater treatment plant.

And those rate hikes need to start soon if the city is going to be able to take advantage of very low interest rates offered by the Illinois Environmental Protection Agency, project engineers say.

Tom Vogel, 72, owner of Vogel's barber shop, is taking the news in stride. Between his home and his business, he expects to pay about $420 more this next year in for sewer and water if the engineers' proposed 22 percent rate increase takes effect – 20 percent for sewer, 2 percent for water.

The increases "will be quite a bit for some people," Vogel said. "But you have to have a good sewer system. You can't have that go to hell."

He supports building a new plant, but is not certain the rates need to be raised so high, he said. "That's a pretty big jump."

Mayor Everett Pannier next month might recommend a sewer rate hike to the City Council, although his suggestion might be lower than 20 percent.

The city's engineering firm, Chicago-based Baxter & Woodman, is suggesting gradual rate increases for at least the next 11 years. If enacted, a water and sewer bill would go from about $70 a month now to about $158 by 2023-24. That's for a combined 5,000-gallons-a-month for both services, an average amount.

Baxter is recommending sewer rates go up 20 percent starting immediately, 22 next year, 13 percent in year three, 5 percent in year four, 3 percent a year for 6 years, then 2 percent the 11th year.

At the same time, water rates would rise 2 percent each year, which would help the city pay operating expenses and keep up with inflation.

"To avoid shocking residents with a huge increase, the increases need to be spread out," said Chris Buckley, the project engineer.

Pannier says he will recommend a gradual increase in sewer rates for the first 3 to 4 years. He declined to be specific, except to say he will recommend as small an increase as possible for the first few years.

The rates need to rise soon to show the IEPA that the city has the wherewithal to pay back a 20-year loan at 1.93 percent interest. That's based on what the agency is offering cities currently, Buckley said, and is a lower interest rate than, say, selling bonds.

The city's loan payments would be about $1.4 million a year.

"It's unfortunate that the city is facing those types of [utility] rate increases, especially in this type of economic climate, but that's unfortunately what we have," Buckley said.

Heather Bramm, 30, of Morrison, a cook at Fat Boy's bar, calls the proposed increases  "ridiculous," especially considering "they've gone up already."

"Most people are living paycheck to paycheck, and the money doesn't go as far as it needs to. Prices keep going up, and wages don't," she said.

"To me, what seems weird is that this kind of came out of nowhere," she added. "All of a sudden, we need to build it and we need to build it now. We knew it wasn't going to last forever. Shouldn't we have been saving money for it already?"

Like Bramm, some Morrison residents may be experiencing a bit of deja vu.

That's because in April 2009, the City Council OK'd a series of water and sewer rate hikes to pay for a $10 million project to overhaul the wastewater treatment plant, construct several miles of new water mains and address environmental concerns. Those hikes took the average monthly bill for both utilities from $40 to nearly $70 this year.

The city also has had to drill a new well and rehabilitate some of its other wells, which cost $4 million to $5 million.

Rates never were increased to the full level predicted – the hikes were halted when the city decided in 2011 that it needed to build a new sewer plant, rather than fix the old one – and so the full $10 million was not raised.

The city also spent some of the rate hike money paying Baxter and Woodman to study the old plant and design the new one, Buckley said.

As a result, there is only about $1 million in its water and sewer fund, said Gary Tresenriter, director of public works.

In addition, the new plant originally was estimated to cost $12.5 million, but the IEPA subsequently ordered the city to repair system problems that have led to sewers overflowing into Rock Creek during storms, and that has added to the pricetag.

Siting the plant also has caused some consternation.

The City Council is considering rebuilding in Waterworks Park, on the northeast side just north of the current plant, but that is closer to houses and has neighbors worried about property values, and other residents concerned that the use of the popular park will be restricted.

One or more sites "downstream," or south of the park, also are being considered. The city would have to buy a site outside the park.

"If we can get it downstream," Pannier said, "it puts it, quite frankly, where I think it should be, which is out of town." He would not specify where the sites are that are under consideration.

Ray Britt, 44, of Morrison, said he supports the rate hikes if it benefits the city.

"Nobody likes to see an increase in cost," he said, but "I know what it's going for. It's not like it doesn't have a purpose."

Proposes sewer rate hikes

If the city goes along with Baxter & Woodman's proposed rate hike schedule, the combined monthly sewer and water bill for an average 5,000-gallon-a-month user will look like this in:

Now: $69.48

2013-14: $84.77

2014-15: $104.82

2015-16: $121

2016-17: $129.40

2017-18: $133.28

2018-19: $137.28

2019-20: $141.40

2020-21: $145.64

2021-22: $150.01

2022-23: $154.51

2023-24: $157.82

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