Monthly sewer rates will not increase in 2010 under a proposal issued today by King County Executive Ron Sims.
Customers served by the county’s regional clean-water utility would continue to pay the 2009 monthly wholesale rate of $31.90 established by the County Council last summer.
The capacity charge levied to newly connecting customers to pay for growth-related system improvements would increase by 3 percent for inflation, taking that monthly rate from $47.64 set in 2009 to $49.07 in 2010.
“This rate proposal enables us to plan for the future by building needed infrastructure today while providing valuable construction jobs to get people working during a serious economic downturn,“ said King County Executive Ron Sims.
“The proposal also helps ensure that the utility remains fiscally and environmentally responsible in carrying out its mission to protect public health and water quality,” said Sims.
In addition to honoring an agreement with the County Council to preserve stable sewer utility rates, Sims’ proposal will generate the necessary revenue and debt service coverage to maintain the utility’s financial health while continuing the prudent financial practices that earned the Wastewater Treatment Division a bond rating upgrade by Moody’s and Standard & Poor’s last summer.
High bond ratings help reduce the cost of planned borrowing needed to fund the construction currently under way on dozens of vital sewer improvement projects, including the $1.8 billion Brightwater Treatment System, which is scheduled to begin operating in 2011.
Sims acknowledged that the proposal to hold the line on rates was a challenge given the current economic climate.
Higher unemployment and an increase in commercial real estate vacancies will likely reduce rate revenues by about $500,000 in 2009 compared to earlier forecasts. A slowdown in the housing market is expected to reduce the amount of revenue generated by the capacity charge, which newly connecting customers pay in addition to the monthly rate to cover the cost of new infrastructure.
Sims’ proposal directs the utility to maintain the spending levels established by the 2009 adopted budget, and to continue pursuing cost-saving measures to minimize future rate increases after 2010.
Examples include deferring non-critical projects to future years and maintaining current staffing levels to operate new facilities. Sims also explained that a rate stabilization reserve, which allows deferring some operating revenue from 2009 to 2010, will help to stabilize the rate after 2010.
A recently completed Brightwater project cost trend report also contained good financial news for the utility’s ratepayers.
Brightwater costs are currently estimated between $1.799 billion and $1.84 billion, which is consistent with the estimates prepared by R.W. Beck, the independent oversight monitoring consultant that reports to the King County Council.
Additionally, it is also possible that the county could secure up to $26 million in federal stimulus funding this year to help defray the cost of some of its shovel-ready projects.
King County’s adopted wastewater budget for 2009 includes about $270.4 million in revenue from the sewer rate and about $34.8 million in revenue from the capacity charge. The 2009 budget also includes about $14.1 million from investments and about $2.0 million from other income such as fees for industrial waste and sewage removed from septic tanks.
The County Council will review Sims’ proposal. By law, the council must vote to adopt the 2010 rate by June 30, 2009.
People enjoy clean water and a healthy environment because of King County's wastewater treatment program. The county's Wastewater Treatment Division protects public health and water quality by serving 17 cities, 17 local sewer districts and more than 1.4 million residents in King, Snohomish and Pierce counties. Formerly called Metro, the regional clean-water agency now operated by King County has been preventing water pollution for more than 40 years.
Note to editors and reporters: Visit the WTD Newsroom, a portal to information for the news media about the Wastewater Treatment Division, King County Department of Natural Resources and Parks: http://www.kingcounty.gov/environment/wtd/Newsroom.aspx
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King County Wastewater Treatment Division