June 16, 2009
No sewer rate increase in 2010
Customers served by King County’s regional wastewater treatment utility will not see an increase in their monthly sewer bill in 2010.
In a unanimous vote, the King County Council today approved the proposal submitted in April by then County Executive Ron Sims to preserve the current wholesale rate of $31.90 that was set by the council in June 2008 and took effect on Jan. 1, 2009.
The capacity charge levied to newly connecting customers to pay for growth-related system improvements will increase by 3 percent for inflation, taking that monthly rate from $47.64 set in 2009 to $49.07 in 2010.
The newly adopted rate 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.
Maintaining a stable rate was challenging given the present 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.
The adopted rate 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.
King County’s adopted wastewater budget for 2009 is $321 million and 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.
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.
King County Wastewater Treatment