Due to a big drop in new construction in the city of Bellevue, residents may see sewer rates go up yet again.
City Administrator Tom Blanchard has advised the City Council to transfer $470,000 from a sewer capitalization savings account to the sewer fund, which has fewer strings attached. He said Thursday that the transfer would allow more "flexibility" in dealing with the projected shortfall.
The capitalization fund was accrued over the past 10 years from $3,500 hookup fees from new residents. The 4.5 percent annual growth rate that filled that account has now dropped to zero growth projections for the next few years.
Blanchard said the city's sewer fund will drop to a balance of $4,000 by 2014, cutting it very close in case of an emergency in the wastewater treatment system.
He said if the council comes up short on money to cover maintenance or other expenses, it will be forced to raise rates.
But not all council members were convinced the funds transfer is a good idea.
"If we take that money out it will be spent," said Councilman Dave Hattula during a meeting Thursday. He advised leaving $100,000 in the cap fund in case of an emergency.
"Being fiscally conservative is key at this point," he said.
The new treatment facility was funded in part with a $6 million bond passed in 2005. An additional $714,000 in city funds was also allocated for it.
Sewer rates have been raised steeply to pay for the new facility. In 2005, the rate was $19.55 per month; today it is $61 per month and may have to rise even further.
In addition to the cost of the new facility, the city also has to spend $85,000 per year for the next three years to pay for the old lagoon-style facility that is being phased out.
The council directed Blanchard to provide sewer fund balance projections for 2014 based on leaving a $50,000 balance and a $100,000 balance in the capitalization fund.
"I can guarantee that we will have to raise rates if the city leaves $100,000 in the capitalization fund," Blanchard said.
· In other Bellevue news:
The council will notify residents living near O'Donnell and Memorial Parks as to the dates when amplified music is played during permitted events. Permit holders will pay for the notices.
Tony Evans: tevans@mtexpress.com
