Refinancing and growth elements help protect current rate
StoryThe Metropolitan King County Council today gave its approval to maintaining the County’s 2016 sewer rates at the 2015 level of $42.03 a month per residential customer equivalent (RCE).
“Holding the line on sewer rates and avoiding a rate increase next year is the result of sound fiscal policies and effective management that protect our rate payers,” said Council Chair Larry Phillips. “Our work to refinance debt at lower interest rates and to find operational efficiencies is paying dividends and saving money for County residents.”
King County protects our region's water quality and prevents water pollution by providing wastewater treatment to 34 cities and local sewer utilities, and one tribe. The revenues generated through sewer rates go toward maintaining and operating the regional wastewater system serving utilities in King County, South Snohomish County and a small portion of Pierce County.
The County was able to keep the sewer rate at 2015 levels as the result of several factors helping to offset upward rate pressure. Those factors include higher than anticipated residential growth and capacity charge revenues as well as the refinancing of sewer bonds. The refinancing is expected to save $15.9 million over the next three years, and over $160 million over 33 years.
The amount ratepayers see on their actual bills will depend on their local sewer utility. Those jurisdictions independently set the rates that appear on bills sent to customers, adding on their own costs and surcharges for local service. Those utilities pipe wastewater from homes, businesses and industry to the county’s regional wastewater treatment system, and pay the appropriate sewer rate charge based on volume of wastewater.
Consistent with the Council’s long-standing policy that “growth pays for growth,” members also approved a sewer capacity charge for new connections to the system in 2016 of $58.70 per month for the average household, an amount that represents a $1.70 increase from the 2015 monthly charge of $57. The capacity charge is based on the 30-year Regional Wastewater Services Plan (RWSP) for infrastructure investments. The RWSP financial policies, established in county code, require the capacity charge to be a uniform charge, approved annually, and the charge is not to exceed the cost of capital facilities necessary to serve customers establishing new connections to the sewer system.
The capacity charge for new sewer hook-ups is paid by owners of newly-constructed homes and businesses that generate the growth, and therefore the demand for service, which requires the construction of new treatment and conveyance facilities. The capacity charge is assessed for 15 years after connection as established by code, but property owners can save 3 percent if they choose to pay a lump sum up front in 2016.
The adopted rate and capacity charge provide sufficient capital and operating funds so there will be wastewater conveyance and treatment capacity to meet the growing needs of the suburban communities as well as the burgeoning housing market in Seattle.
Today’s vote ensures that King County meets its contractual obligation to its 34 customer utilities to have the sewer rate for the coming year in place by June 30.