May 6, 2009 in City

County sewage rates could increase

Officials must decide how to pay for plant, renovations
By The Spokesman-Review
 

What’s next

 After the commission tentatively decides on its options, commissioners will likely hold a public meeting to explain the proposed rates in early June and a public hearing on them in late June.

 They would probably vote on a new rate structure in late July so they can sell bonds in August to begin work on the wastewater treatment plant.

Residential sewer rates in Spokane County could go up between $2.50 and $10 a month next year, and by as much as $18 a month by 2013, depending on how government officials decide to pay for changes to the wastewater treatment system.

A range of options was described Tuesday to Spokane County commissioners, who must decide how to pay for a $148 million treatment plant along with another $105 million in improvements to the sewage system.

They’ll have to decide what kinds of bonds to use, how many years they want to spend paying them off and when to raise certain rates and fees, such as the “general facilities charge” for hooking up to the sewer system.

The number of new homes being added to the system is down, county Utilities Director Bruce Rawls said. In 2007, the county was projecting at least 600 new residential units a year; now it’s expecting about 200 a year this year and next, and about 420 in 2011.

That’s not all bad, Rawls added. It means the new treatment plant won’t reach capacity quite so soon.

Officials plan to talk with the county’s financial advisers about the benefits of selling revenue bonds or general obligation bonds for the new treatment plant, and whether to pay them off in 20 or 25 years.

Revenue bonds, which would be repaid by sewer rates, usually carry a higher interest rate than general obligation bonds, which are repaid by taxes.

But the county can only carry so much debt in general obligation bonds before the financial markets lower its bond rating, county Chief Executive Officer Marshall Farnell said.

Commissioner Todd Mielke asked whether, if the county pays off its bonds in 20 years and still has capacity in the treatment plant, sewer rates could go down at that point.

That would be unlikely, said Rawls, because other costs would rise and new requirements would add new costs.

“I’ve never seen rates go down, ever,” Rawls said.

Jim Camden can be reached at (509) 459-5461 or by e-mail at jimc@spokesman.com.

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