King County Councilmembers Bob Ferguson and Steve Hammond today led the way for a significant revision to the county’s sewer capacity charge that will protect buyers of new homes from unexpected hikes in the charge over the next three years. The Council today adopted both a basic sewer rate for the next two years and a capacity charge for the next three years.

“Our careful oversight locks in rational rates for the next three years, giving buyers and builders certainty and keeping King County true to our policy that ‘growth pays for growth,’” said Ferguson.

The sewer capacity charge is assessed on new homes, in addition to the monthly sewer rate, to ensure that new customers who generate increased demand for services bear the cost of building a third wastewater treatment plant, the Brightwater plant. The Council adopted a monthly capacity charge of $34.05 for 2005-2007. The new rate is lower than a 2001 projection of $34.78 per month for 2005 thanks to a commitment by the Wastewater Treatment utility to find $70 million in savings in the construction of Brightwater and other wastewater projects. The new rate also stabilizes costs for homebuyers by avoiding a steep jump in the previously-proposed capacity charge, from $28.50 for 2005 to $36.05 for 2006 and then up to $37.13 in 2007.

“This Council has a responsibility to adopt an honest and accurate assessment based on previously adopted policies and the best projections that we currently have,” said Hammond. “This will give rate payers and home buyers an accurate and stable look at the costs they are facing. This was a difficult vote, but one that makes sense in the long run. Sometimes you have to bunt to forward the runner.”

“I dislike higher rates as much as the next person, but there’s a cost to doing business and to building new sewage treatment facilities to meet this region’s growth,” said Ferguson. “I thought the proposed rate was bad public policy since we would see an artificially low charge next year, while knowing we would come back and dramatically hike the rate the following years.”

After Ferguson and Hammond raised questions, the County Executive’s staff reviewed their figures and returned with a three-year proposal that meets service needs and follows the practice of making adjustments for inflation only. The legislation passed today also requires two reports to the Council: one on cost-saving efforts including phasing for Brightwater, and another on cost-saving options for wastewater projects other than Brightwater.

“I feel that it is prudent for the Council to provide the incentive and framework to achieve further cost savings on this project,” said Hammond. “A three-year rate that sets a ‘cap’ sends the message that this Council expects the Brightwater project to come in on budget. This ensures accountability for all ratepayers.”

“Under the legislation we passed today, people who buy new homes during the next three years pay a lower-than-proposed rate, there is certainty about rate levels, and King County scours Brightwater and other projects for cost savings,” said Ferguson. “That’s smart all around. I want to thank Executive Sims for working closely with us on this revision.”

Councilmembers also restated their commitment to obtain the authority necessary from the State Legislature to make the capacity charge a regular up-front fee for a new home. Monthly payments over 15 years would still be allowed, but a single lump-sum payment would be the “default” method.

“With a lump sum paid prior to closing on a home the average buyer will save $2,000 or more in interest payments,” Ferguson explained. “The county will work with buyers, builders and realtors to make sure that buyers know they can make the single up-front payment and save. The owner of a new home can find better things to do with $2,000 than use it for interest on the sewer capacity charge.”

Read more about this legislation on the King County Council’s LEGISEARCH system at mkcclegisearch.metrokc.gov and type in “2004-0199”