Council Sets Sewer Rate and Stabilizes Capacity Charge for New Hook-ups

The Metropolitan King County Council today voted 12-1 to set a sewer rate for the next two years and a capacity charge that will stabilize rates for new hook-ups over the next three years – thanks to a commitment by the county’s wastewater utility to find $70 million in savings in the construction of Brightwater and other wastewater projects.

“Growth should pay for growth, and these rates ensure that those new residents who require the region to build a new treatment plant to support our growth are the ones responsible for paying for it,” said Budget and Fiscal Management Committee Chair Larry Gossett. “Existing residents have already paid for the system we have in place, and they should not have to pay for it again. I’m pleased with the collaborative and bipartisan approach our members have taken to find innovative solutions that benefit our citizens.”

The new monthly sewer rate of $25.60 per month supports maintenance and operation of the county’s existing wastewater treatment system and is paid by all of its customers. The proposed rate will help offset an increase in debt service cost, a modest increase in operating costs, and creation of a rate stabilization reserve of $9.25 million. The increase of 9.4 percent over the current monthly rate of $23.40 is the first since 2002 and is expected to stay in place for two years, in line with Council policy to set multi-year rates to help assure predictability and stability.

The capacity charge for new homes ensures that new customers who generate increased demand for services bear the cost of building a third wastewater treatment plant, the Brightwater plant. The capacity charge for 2005-2007 will increase from $18.00 to $34.05 per month, an amount that is less than the $36 to $37 per month originally been proposed for 2006 and 2007. The new rate is lower than a 2001 projection of $34.78 per month for 2005 due to $70 million in savings in the construction of Brightwater and other wastewater projects identified by the Wastewater Treatment utility. 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.

“Ever since the Metro-King County merger in 1994, this Council has saved homeowners $184 million in sewer rates by reducing the utility’s debt service costs, cutting operating costs, and improving its bond rating,” said Council Chair Larry Phillips. “That saved each household more than $57 per year over the past ten years. We expect the wastewater utility to find even more savings and efficiencies through its successful Worker Productivity Initiative, which produced $1.2 million in savings that helped keep the new sewer rate down. We will also look for more savings by working with the Executive, suburban cities, the city of Seattle and local sewer districts on strategic phasing of Brightwater and other wastewater projects to bring them online just when we need them, and no sooner.”

The monthly capacity charge is assessed for 15 years after connection, but buyers can save $2,000 or more in interest payments if they choose to pay a lump sum up-front.

“The capacity charge we enacted is less than the $36 to $37 that had been previously proposed, thanks to significant cost efficiencies identified by county staff,” said Gossett. “These include $70 million in savings from a value engineering process for the Brightwater project, savings from a re-scheduling of wastewater conveyance projects that are unrelated to Brightwater, and savings from adoption of a new discount rate. We are also directing the Executive to notify new homebuyers of their option to get a significant discount by making a lump sum payment.”

King County’s Wastewater Treatment Division collects wastewater from cities and utility districts and conveys it to treatment plants in Renton and West Point. Among its clients are 35 local agencies or districts in King County, south Snohomish County and a small portion of Pierce County. Today’s vote meets contractual obligations to have the sewer rate for the coming year in place by June 30.

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