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Sewer and recycling rate increases discussed at planning session

By Kelly Terpstra,

Sewer and sanitation — those costs for Charles City customers might soon be on the climb.

Raising sewer and garbage/recycling rates were among the topics discussed at a City Council planning session Wednesday.

The proposed new water resource recovery facility (WRRF) could begin construction this summer. The $18 million wastewater treatment plant, which could be completed by 2022, is in response to new requirements by the Iowa Department of Natural Resources that can’t be met by the current 52-year-old city facility.

City Administrator Steve Diers said the city is looking to borrow approximately $19 million from the State Revolving Loan Program to pay to help aid in that construction. The city could also fund the project via existing sewer funds — which could range from $1.5 million to $2 million.

Based on a 30-year loan with an interest rate of 1.75 percent, the city is looking to implement a 20 percent increase in the sewer rates to be effective upon a change in the ordinance. That rate change could come as soon as April this year and be noticed on customer’s bill in May. Diers said this would be a one-time increase in addition to the annual 3.5 percent increase that has taken place since 2008.

“In the long run, yeah, we’re all going to start paying more now up front. But it may help save on the borrowings, at least to some extent. Which saves on interest costs and everything else on down the line,” said council member DeLaine Freeseman.

The city’s findings and analysis are based on Simply Essentials operating at 50 percent of capacity. Simply Essentials is in contract with the city on a negotiated treatment agreement for its sewer usage above the city code.

“Nobody wants to see a rate increase. Nobody likes to see their bills go up,” said Diers. “What we try and do is try and make it as painless as possible. The fact that we’ve been stepping up the rates the last 10 or 12 years points to that.”

Diers said had the city not annually increased rates since 2008, that 20 percent increase would have jumped up to 69 percent.

A customer who uses 6,000 gallons a month, for example, would see their current bill of $38.62 increase to $46.37.

The current base rate or monthly access fee for sewer use in Charles City is $9.52. With the 20 percent increase that would rise to $11.43. The current variable rate is $4.85 per 1,000 gallons of use a month, which will increase to $5.82.

Another factor that entered into the rate change was Charles City being designated as a “disadvantaged community,” which lowered its loan rate from 2.75 percent for 30 years all the way down to 1.75. That will save the city $122,000 annually and $3.5 million over the course of the loan period.

“That was no small feat. I don’t want to underplay that,” said Diers.

The first reading of this sewer rate increase should be able to be on Monday’s City Council agenda according to City Attorney Brad Sloter.

Jendro Sanitation President Alan Powell was on hand to talk about residential garage and recycling rates.

“China has been steadily increasing their import restrictions over the last four or five years. They felt they were the dumping ground of the world,” said Powell.

The cost his company has to pay for transportation of freight, the cost of processing and tipping fees has skyrocketed, he said.

“It used to be we got paid just a little bit. Then it went to we started paying a little bit. Then it went to we started paying a little bit more. What really hurt was when they said, ‘we’re not going to pick it up anymore,’” said Powell.

Powell said his business has been backed into a corner. The price to pay for recycled material has gone up from $5 a ton to $20. The cost to transport the material has climbed to $40 a ton.

“We’re baling material and stacking it outside because I cannot afford to move it,” said Powell. “There is just not enough revenue in our cost structure to do that and that’s why I’m here.”

Powell suggested a rate increase of $1.51 across the board. The current pricing to use totes to recycle and place one’s garbage in is as follows:

2018 Pricing and Usage

Can Size Gallons           2018 Current Pricing     Containers Used

35                                           $12.00                    1,099

65                                           $15.00                    1,570

95                                           $18.00                    316

There was a separate second rate increase proposal which wouldn’t be fixed but based on the gallon size of the tote. A 35-gallon tote would see a $1 increase, a 65-gallon would bump up $1.75 per month and the 95-gallon tote would increase $2.50 per month.

Council member Freeseman asked Powell if this fix could be a remedy that could help keep the rate steady and unchanged for three or four years.

“I’d hate to come back in another year or six months or whatever,” said Freeseman.

Powell’s answer was one you would expect with the constant volatility of the garbage/recycling market along with the trades issues that the United States and China have been experiencing.

“I don’t know. My crystal ball is pretty cloudy these days,” said Powell.

Scott Sweet, an engineer for WHKS, started the meeting off with his presentation about possibly building a pedestrian bridge at Wildwood Golf Course. There would be an appropriate bridge constructed and cart path that would provide access to holes 5, 6, and 7 on the golf course.

“During high water events, it’s not accessible to play or maintain those holes. You just can’t get across the creek,” said Sweet.

There were two bridge options that Sweet delved into and explained that could be built in the coming years to combat the flooding of Sherman Creek.

One is a steel truss bridge that would be the most expensive of the two. The 150-foot pedestrian bridge would come to a total cost of $387,000.

The second alternative was a railroad flat car bridge, which would be comprised of two 75-foot railroad cars built together. That estimated cost was $217,000.

“The problem with the current bridge that’s out there, is the debris builds up on those stone bridges. It changes the course of that creek and it goes around the end of the current bridge so you can get on the bridge, but you can’t get through the water to the other holes,” said Parks and Recreation Chairperson Dennis Petersen.

Parks and Rec Director Steve Lindaman said this project is more in the fact-finding stage rather than in giving the council a recommendation either way.