Sims’ sewer rate proposal stresses clean-water investments, continued sound financial practices- King County

April 18, 2008

Sims’ sewer rate proposal stresses clean-water investments, continued sound financial practices

Emphasizing the need for ongoing investments in clean-water infrastructure and sound financial management practices, King County Executive Ron Sims today delivered his 2009 monthly sewer rate proposal to the County Council.

Sims urged the council to adopt a monthly wholesale sewer rate of $30.20, an 8 percent increase over the current rate of $27.95 that initially took effect in 2007. The proposed monthly rate increase of $2.25 is significantly less than the increase forecast in the 2008 adopted budget, which would have put rates at $32.97.

The proposed capacity charge paid by newly connecting customers in addition to their monthly sewer bill would increase by 3 percent– from $46.25 to $47.64 per month.

Sims said the proposed sewer rate and capacity charge increases are critical for funding sewer improvement projects to serve growth and protect regional water quality while preserving the utility's solid credit rating.

"I am very sensitive to concerns about asking ratepayers for more money when so many people are feeling the pinch of a slowing economy," Sims said. "My proposal makes rate stability a priority by spreading increases over several years, which will guard against dramatic rate spikes in the future."

"We can't afford inaction. Neglecting our infrastructure could mean sewage overflows, fines, and a possible building moratorium across much of the central Puget Sound region, and that's just not acceptable."

The biggest factor leading to the proposed 2009 sewer rates is current expansion of the wastewater utility system – its greatest expansion since the 1960s. Work currently under way includes the Brightwater Treatment System, which is expected to comprise about 75 percent of the Wastewater Treatment Division's capital spending over the next three years.

A recent cost trend prepared by the Wastewater Treatment Division shows that the Brightwater price tag has increased over the past year by 2 percent, or $34.9 million, putting costs of the project at $1.8 billion.

In addition to the large amount of capital spending, recent economic turmoil in the municipal bond markets has significantly increased the cost of the borrowing needed to fund the new construction. Other market conditions affecting project costs and ongoing operations include skyrocketing prices on commodities such as diesel, concrete, chemicals and steel, and a very competitive construction project bidding environment.

Sims' 2009 sewer rate proposal takes these changing economic factors into consideration, stressing a variety of cost-reduction measures to stabilize the rate for 2009 and beyond.

The Executive's proposal includes the elimination of more than $66 million in Wastewater Treatment Division expenditures between 2008 and 2010 by deferring non-critical projects to future years after Brightwater's completion. It also includes reductions in other lower priority programs, and utilizing 26 existing staff positions to operate the new Carnation and Brightwater treatment plants.

Sims also recommended a companion ordinance for the County Council's consideration that would authorize the Wastewater Treatment Division to issue up to $1.1 billion in sewer revenue bonds, allowing greater flexibility to borrow money using financial strategies that can stabilize rate increases over the next five years.

In a break with his preferred policy, Sims proposed a single-year rate for 2009, as opposed to the preferred multi-year rate. This enables us to make adjustments next year in case the economic conditions change significantly or we experience schedule delays of larger projects.

"My proposal for a single-year rate for 2009 comes with the pledge to continue diligently working at reducing the rate increases projected for 2010 and beyond," said Sims.

"It's important that people know that their sewer rate is an investment with tangible returns – clean water you can swim in, a healthy environment for our children to enjoy, and a continued quality of life that makes our region an attractive destination to live, work and play," said Sims. "These clean-water investments also underscore King County's commitment to the healthy Puget Sound as a member of the Puget Sound Partnership."

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.

King County Executive, Ron Sims County news Executive initiatives Excellence in Government Executive offices Biography Contact information King County Executive Office Ron Sims, King County Executive 701 Fifth Ave. Suite 3210 Seattle, WA 98104 Phone: 206-296-4040 Fax: 206-296-0194 TTY Relay: 711	KING COUNTY HOME \| NEWS \| SERVICES \| DIRECTORY \| CONTACT King County Executive, Ron Sims King County Executive You're in: King County Executive, Ron Sims print April 18, 2008 Sims’ sewer rate proposal stresses clean-water investments, continued sound financial practices Emphasizing the need for ongoing investments in clean-water infrastructure and sound financial management practices, King County Executive Ron Sims today delivered his 2009 monthly sewer rate proposal to the County Council. Sims urged the council to adopt a monthly wholesale sewer rate of $30.20, an 8 percent increase over the current rate of $27.95 that initially took effect in 2007. The proposed monthly rate increase of $2.25 is significantly less than the increase forecast in the 2008 adopted budget, which would have put rates at $32.97. The proposed capacity charge paid by newly connecting customers in addition to their monthly sewer bill would increase by 3 percent– from $46.25 to $47.64 per month. Sims said the proposed sewer rate and capacity charge increases are critical for funding sewer improvement projects to serve growth and protect regional water quality while preserving the utility's solid credit rating. "I am very sensitive to concerns about asking ratepayers for more money when so many people are feeling the pinch of a slowing economy," Sims said. "My proposal makes rate stability a priority by spreading increases over several years, which will guard against dramatic rate spikes in the future." "We can't afford inaction. Neglecting our infrastructure could mean sewage overflows, fines, and a possible building moratorium across much of the central Puget Sound region, and that's just not acceptable." The biggest factor leading to the proposed 2009 sewer rates is current expansion of the wastewater utility system – its greatest expansion since the 1960s. Work currently under way includes the Brightwater Treatment System, which is expected to comprise about 75 percent of the Wastewater Treatment Division's capital spending over the next three years. A recent cost trend prepared by the Wastewater Treatment Division shows that the Brightwater price tag has increased over the past year by 2 percent, or $34.9 million, putting costs of the project at $1.8 billion. In addition to the large amount of capital spending, recent economic turmoil in the municipal bond markets has significantly increased the cost of the borrowing needed to fund the new construction. Other market conditions affecting project costs and ongoing operations include skyrocketing prices on commodities such as diesel, concrete, chemicals and steel, and a very competitive construction project bidding environment. Sims' 2009 sewer rate proposal takes these changing economic factors into consideration, stressing a variety of cost-reduction measures to stabilize the rate for 2009 and beyond. The Executive's proposal includes the elimination of more than $66 million in Wastewater Treatment Division expenditures between 2008 and 2010 by deferring non-critical projects to future years after Brightwater's completion. It also includes reductions in other lower priority programs, and utilizing 26 existing staff positions to operate the new Carnation and Brightwater treatment plants. Sims also recommended a companion ordinance for the County Council's consideration that would authorize the Wastewater Treatment Division to issue up to $1.1 billion in sewer revenue bonds, allowing greater flexibility to borrow money using financial strategies that can stabilize rate increases over the next five years. In a break with his preferred policy, Sims proposed a single-year rate for 2009, as opposed to the preferred multi-year rate. This enables us to make adjustments next year in case the economic conditions change significantly or we experience schedule delays of larger projects. "My proposal for a single-year rate for 2009 comes with the pledge to continue diligently working at reducing the rate increases projected for 2010 and beyond," said Sims. "It's important that people know that their sewer rate is an investment with tangible returns – clean water you can swim in, a healthy environment for our children to enjoy, and a continued quality of life that makes our region an attractive destination to live, work and play," said Sims. "These clean-water investments also underscore King County's commitment to the healthy Puget Sound as a member of the Puget Sound Partnership." 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.
	To top
	Updated: April 20, 2008