Friday, April 22, 2011

Bellevue sewer rates could rise again

Bond payments coming due for wastewater treatment plant

Express Staff Writer

The city of Bellevue raised rates for sewer service after building a new wastewater treatment plant, above. Photo by David N. Seelig

Now that many homes in Bellevue are in foreclosure and high unemployment rates have left some people unable to pay their bills, the city's new state-of-the-art $7 million sewer plant is beginning to look like a shiny albatross hanging around city leaders' necks.

Bellevue leaders are considering raising sewer rates yet again in order to pay for the city's new "bio-reactor" wastewater treatment plant, which went into operation last summer.

City taxpayers funded the new facility by passing a $6 million, 20-year revenue bond in 2005, the same year sewer rates were raised from $18.21 to $35 per residential hookup.

Voters had reason to believe their rates would not rise again in the near future.

"Bellevue residents won't feel any additional fiscal impacts above the already increased sewer rates if the bond is approved," said former City Administrator Tom Blanchard prior to the bond vote in 2005.

Today, sewer services are costing Bellevue residents $64 per month and water costs are $24 per month.

"Up until when we built the new plant, the water bill was the higher bill of the two," said City Clerk Dee Barton at a council meeting Thursday, April 14.

Sewer rates could rise to $67 per month, following a presentation to city officials by Keller and Associates engineering firm on Thursday, April 28.

The Bellevue City Council voted April 14 to hire the firm to compute potential revenue increases to the city's sewer fund based on a 4.9 percent increase in sewer rates.

"It is the maximum we can raise them without a public hearing," Barton said at the meeting.

The council already plans to raise rates about 3 percent per year indefinitely to help pay for the new plant, but as city leaders have learned the hard way, there is no guarantee the bills will ever be paid.

Barton said only 33 percent of residents are paying their sewer bills and only 60 percent are paying their water bills. Many accounts are going to collections and the city has started shutting off service to people grossly in arrears on their bills.

"This is disturbing," said Councilman Dave Hattula. "Are bills going to have to go up because some people are not paying?"

The new sewer plant was planned when the city was negotiating with developers Harry Rinker, John Sherer and Jeff Pfaeffle over major annexation requests, which would have brought hundreds of new homes into the city limits.

Only Pfaeffle's annexation was approved. The city has plans to use $400,000 of a $500,000 annexation fee, due from Pfaeffle in 2014, to enrich the sewer fund.

Blanchard said in 2005 that the new plant was also needed because the city was out of compliance with Idaho Department of Environmental Quality restrictions on nitrogen limits in discharge.

Before Blanchard's position was eliminated to save costs at City Hall in February, he convinced the City Council to transfer $470,000 in capitalization fees to the sewer fund.

Barton said the sewer fund will drop from $660,000 to $205,000 after May 1 when the city pays its first annual $400,000 bond payment to begin paying for the new plant.

She said the City Council will learn more about the city's financial position with regard to the sewer fund after the April 28 meeting.

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