WILLMAR -- Sewer rates would double over the next three years to pay for the new $86 million wastewater treatment plant under a proposal presented Tuesday.
The proposal will enable the city to start paying for the bonds and debt service that are financing the project, according to City Administrator Michael Schmit.
The new plant is scheduled to be up and running in 2011. That's when the city will begin paying the debt service, he said during a Willmar City Council meeting.
The increases were not a surprise to council members who received the proposed rate structure and proposed revisions to the sanitary sewer ordinance during an informational meeting at the City Office Building.
"We knew this was coming when we let the bids and financing,'' said Denis Anderson. "It is what we agreed to do.''
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The rate schedule and revised ordinance will be presented at the regular council meeting Monday.
Schmit said the "target'' rate for residential users was around $40 per month, give or take. He and staff members have discussed the target for a number of months in response to council directives to try to hold the line on increases.
Council members asked how much rates could increase after 2012.
Schmit said it's impossible to say how much rates would go up in 2013. But he said the increases in the next four years are intended to get the financing plan up to speed.
"Assuming the city does that and the usage charges remain constant, then we'll be pretty much on an even keel for a while and should only have to deal with increases in the operation of the plant,'' he said.
"Once we get to that point, then we should be dealing with operational increases.''
Schmit thanked his staff, project consultants Donohue and Associates and financial consultant Springsted Inc. for their help in preparing the information.
The text in the present ordinance dates back to the 1970s. Schmit said many things have happened since then, such as new state and federal regulations. The new ordinance will be more comprehensive, but not many major changes are planned.
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City Public Works Director Mel Odens said the ordinance will protect the living organisms that clean the wastewater. "It protects our process,'' he said.
New ordinance requirements will help the city manage and enforce proper disposal of fats, oil and grease, which tend to block the flow and cause sewage backup if not caught in time.
The ordinance will encourage residents, commercial businesses including restaurants, and industrial users to keep fats, oil and grease out of the treatment system and to dispose of those substances in the garbage.
The city has sent letters and posters to businesses and will be distributing residential door hangers to educate and encourage proper disposal.
"People will do the right thing if they know what the right thing is,'' said Odens.
Rates are typically comprised of an administrative charge (the cost for billing), the utility improvement charge (a fixed $4 charge for utility replacement and storm water improvements), a usage charge (based on water usage) and the meter charge (based on the size of the meter).
The charges that will increase the most are the usage charge and meter charge.
"It really comes down to how big a service you have and how much water you use,'' said Schmit.
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For the average residence, the usage charge is estimated to increase from $8.91 in 2008 to $18.85 in 2012. The meter charge would increase from $7.66 in 2008 to $18 in 2012.
Rates will also increase for wastewater users such as those on Eagle Lake and a few commercial and industrial users in Willmar who do not have metered water service.
