Council approves 2014 sewer rate that maintains 2013 levels

June 10, 2013

Summary

Efficiencies, refinancing, improving economy protect current rate

Story

The Metropolitan King County Council today gave its approval to maintaining County sewer rates in 2014 at the 2013 level of $39.79 a month per residential customer equivalent.

“We have worked hard to find efficiencies. These efficiencies are resulting in savings for our customers,” said Councilmember Joe McDermott, chair of the Council’s Budget and Fiscal Management Committee.

“Holding sewer rates level and avoiding a rate increase next year is the result of sound fiscal management and policies that protect rate payers,” said Councilmember Larry Phillips, Chair of the Regional Water Quality Committee. “We worked hard to find efficiencies and refinance debt at lower rates in order to save money for ratepayers.”

King County protects our region's water quality and prevents water pollution by providing wastewater treatment to 34 cities, local sewer utilities, and one tribe The funds raised through sewer rates go toward maintaining and operating the regional wastewater system serving customers in King County, south Snohomish County and a small portion of Pierce County.

The efficiencies and cuts adopted by the Council last year, combined with debt refinancing at lower interest rates, an improving economy, and prudent use of the rate reserve ensured that the 2014 sewer rate would remain at the 2013 level. More than half of the sewer rate goes toward debt service payments, at a time when King County’s Wastewater Treatment Division has just completed its biggest expansion of the treatment system in a quarter century.

A quarter of the rate goes to operating expenses (everything from labor costs to operational costs at the treatment plants and conveyance facilities). The remainder pays for overhead charges from county agencies and other interdepartmental services, including water quality testing and direct capital payments.

The amount ratepayers see on their actual bills will depend on their local sewer utility. Those jurisdictions independently set the rates that appear on bills sent to customers, adding on their own costs and surcharges for local service.

Consistent with the Council’s long-standing policy that “growth pays for growth,” members also approved a sewer capacity charge for new connections to the system in 2014 of $55.35 per month for the average household, an amount that represents a $1.85 increase from the 2013 monthly charge of $53.50. The capacity charge is based on long-term 30-year projections (of customers and anticipated debt burdens for capacity-type projects through the year 2030) with the projections updated every three years. 2014 is an update year and the increase reflects the most recent information on cost estimates and the actual costs for projects.

The adopted rate and capacity charge provide sufficient capital and operating funds so there will be wastewater conveyance and treatment capacity to meet the growing needs of the suburban communities as well as the burgeoning housing market in Seattle.

The capacity charge for new sewer hook-ups is paid by owners of newly-constructed homes and businesses that generate the growth, and therefore the demand for service, which requires the construction of new treatment and conveyance facilities. The capacity charge is assessed for 15 years after connection as established by code, but property owners can save 5.5 percent if they choose to pay a lump sum up front in 2013. That discount rate is expected to drop to 2.7 percent in 2014 based on a new code provision that ties discount to prevailing interest rates and other factors.

Today’s vote ensures that King County meets its contractual obligation to its 34 customer utilities to have the sewer rate for the coming year in place by June 30.