|
|
|
|
|
|
April 18, 2003
County Executive recommends no increase in sewer rate for 2004
Based on the success of cost-saving measures, King County Executive Ron Sims is recommending no increase in the monthly sewer rate for wastewater treatment. If approved by the King County Council, the rate in 2004 would remain $23.40 a month for the third consecutive year.
"Two years have passed since adoption of the 2002 sewer rate, with our pledge to hold the rate stable through 2004," Sims said. "Multi-year rates present challenges in times of economic uncertainty, and the Wastewater Treatment Division has responded to these challenges with innovation, efficiencies and new approaches to getting the work done."
Sims credited the ability to keep rates at $23.40 to sound fiscal management by the utility over the three years of the rate commitment. Savings in the last two years gave the utility the ability to off set losses in revenue and other challenges affecting its 2004 budget. The economic downturn caused a loss in revenue from business customers in 2001 and 2002 while the residential customer base continued to grow. These revenue reductions amounted to $5.8 million in 2003 and are expected to grow to $7.3 million in 2004.
For 2003, the utility expects operating expenses to be $83.4 million, $1 million less than budgeted and is only 3.4 percent more than actual expenses in 2002. For 2004, Sims' wastewater treatment staff is projecting operating expenses of $84.7 million, assuming $1.5 million in reductions from its productivity program. "We're committed to this level even while implementing new odor control and security policies and absorbing expected increases in employee benefits and insurance charges," Sims said. In 2002, the Wastewater Treatment Division operating expenses were $8.7 million less than projections including $2.3 million saved through the employee productivity initiative. The productivity initiative is on target to save $2.4 million in 2003 operating expenses. The utility also reduced costs by reviewing budgets and schedules for each of its construction projects. The division began a new process for ranking and setting priorities for its capital projects based on short-term cash flow and long-term projections. Another factor to maintaining stable sewer rates is accelerating capital expenses by $42 million for 2003 and $54 million for 2004. By moving forward with those construction projects, the division is using more available revenue to pay its costs rather than paying for them through using debt financing. That tends to lower sewer rates while keeping the capital program on schedule. In addition, King County took advantage of lower interest rates in 2002 and 2003 to refinance $443 million in existing sewer bonds for its capital construction program. That refinancing will save $1.3 million in continuing debt service. In 2002, King County also secured low-interest loans from the state revolving fund for about $33 million in 2003 and $19.6 million in 2004. Those loans should save about $250,000 each year in interest payments compared with using revenue bonds. King County's Wastewater Treatment Division protects regional public health and water quality by serving 18 cities, 15 sewer districts and more than 1.4 million residents in King, Snohomish and Pierce counties. Updated: April 18, 2003 Executive's news Executive's site map | E-mail the Executive By visiting this and other King County web pages, you expressly agree to be bound by terms and conditions of the site. The details. |
|