Sewer rate increase of 40% will begin July 1, at lower percentages for next five years as means to help fund wastewater treatment plant

by Joe Moses

The City of Waukon is moving forward with preparations for the construction of a new wastewater treatment facility following an administrative order from the Environmental Protection Agency (EPA). To remain in compliance with changing EPA regulations, the City is working with Fehr-Graham Engineering in developing plans for the new wastewater treatment facility. During this ongoing planning process, City Manager Dean Hilgerson and City Clerk Allen Lyon have provided updates to The Standard regarding funding and construction-related aspects of the project, with recent decisions by the Waukon City Council being made regarding a sewer rate increase beginning in July that residents can expect to see starting with their third quarter billing later this year.

Hilgerson has indicated that City of Waukon Water and Sewer Superintendent Bob Campbell and Project Engineer Lucas Elsbernd of Fehr-Graham Engineering are confident in the oxidation ditch choice for meeting EPA regulations with the new wastewater treatment plant. The Anti-degradation Alternative Analysis, a required study in order to protect water quality and to prevent unnecessary pollution, has been completed as of the end of September 2017, which helped establish the best type of facility for Waukon’s water treatment needs. Other aspects considered include water discharge requirements to meet EPA regulations, the cost of construction and ongoing operation costs, which are factors that support the decision to move from a trickling filter system currently in use to an oxidation ditch wastewater treatment facility.

Hilgerson discussed the project timeline, with Fehr-Graham Engineering currently in the process of creating preliminary plans and specifications, which will be reviewed and approved in June 2018. Hilgerson anticipates that the final plans and specifications will be complete in August/September with a letting date in November 2018. Construction could begin on the project as early as February 2019, depending on weather conditions, with much of the construction taking place during the March to December construction season of that year and an extension possibility perhaps allowing construction to continue into 2020, if necessary.

The City of Waukon has acquired the services of a financial advisor, which is a requirement of the State Revolving Fund (SRF) loan program being used to help fund the new plant through the State of Iowa and the Department of Natural Resources (DNR), ensuring compliance in budgeting and repayment and in determining funding necessary through a sewer rate increase and in applying for a Community Development Block Grant (CDBG). In conjunction with the CDBG grant, an income survey (see shaded box accompanying this article) is being conducted to determine if Waukon will qualify as a low-to-moderate income community, which will aid in the grant and funding process for the project.

The City’s financial advisor, Travis Squires of Piper Jaffray, has reviewed the calculations necessary for the repayment of the 20-year loan for the project, which requires a minimum annual increase in the sewer rate only, not water or other utility rates. These sewer rate increases will begin with the next fiscal-year and will involve increases of 40% July 1, 2018; 30% July 1, 2019; 15% July 1, 2020; 10% July 1, 2021 and 7% July 1, 2022.

City officials emphasize that these sewer rate increases are necessary to make the annual loan payment on the new treatment plant of $566,000 for a period of 20 years to fund the nearly $9,000,000 wastewater treatment facility project. The rate increases were calculated with the annual loan payment in mind, minimizing the impact upon sewer rates to customers as much as possible.

Hilgerson further emphasized that customers will be impacted by an increase to their sewer rate but not an increase to other portions of their utility bill, such as water or garbage. He said that has been a misconception during early discussions of this matter.

The Waukon City Council approved the first reading of the new Sewer Rate Ordinance at its April 16 council meeting. Additional required readings are scheduled to take place and adoption is likely during the council’s regular meetings in May, the next one of which is slated for Monday, May 9 at 7 p.m. in the council chambers at Waukon City Hall.