Sewer overhaul could mean eventual 137% rate increase

bfortune@herald-leader.comAugust 24, 2011 

Flushing your toilet and taking a shower could get steadily more expensive in Lexington.

Starting in about 2013 and continuing through 2026, Lexington sewer bills could increase as much as 5 to 10 percent yearly as the city spends an estimated $540 million to overhaul its sanitary sewer system, according to projections presented to the Urban County Council at its committee of the whole meeting Tuesday.

The average sewer bill could jump 137 percent by 2026 to $71 a month, according to the projections. The sewer bill today for a Lexington household of 2.5 individuals using 80 gallons of water per person per day is about $30.

"It's a model based on a tremendous number of assumptions, but that's what the model tells us," said Charlie Martin, the city's director of water quality.

Tuesday's discussion was not primarily about rate increases, but they came up as Martin and Ryan Barrow, the city's budget director, discussed financial models for upgrading Lexington's sewers.

Martin said he has sought input from city officials, residents, educational, civic and corporate entities since January about how large a storm they wanted the city's sewers to be able to handle.

In June, the council asked Martin to return with comprehensive cost projections, including personnel, operating expenses and existing and proposed debt figures.

Lexington is overhauling its sewers because the city was found in violation of the federal Clean Water Act, and the U.S. Environmental Protection Agency filed a lawsuit against the city in 2006. The city and the EPA entered into a consent decree that requires Lexington to fix its sanitary sewer system.

Martin's office must submit three sewer-system remedial plans to the EPA, and the first one is due in October. The plans have to detail what size sewer pipes will be used, construction schedules and projected costs. The city does not expect a response from the EPA about the first remedial plan until sometime in 2012.

The city's division of water quality is recommending a sewer overhaul to accommodate a 24-hour storm dropping 3.2 inches of rain; such a storm could be expected about once every two years. That overhaul would cost an estimated $540 million.

Council members voted to put a resolution on Thursday night's docket directing the Department of Environmental Quality and Public Works to prepare a plan using that model.

A more extensive overhaul to handle a storm of 3.8 inches of rainfall, likely perhaps once every five years, would cost an estimated $718 million; equipping the sewers to handle a storm of 4.3 inches of rain, likely about once a decade, would cost $814 million.

The larger projects could mean average monthly sewer bills of $81 to $86 by 2026. Martin said "it just doesn't seem cost-effective" to pay the larger amounts to take care of another half-inch of rain.

He said his division recommended the lowest cost and the smallest storm that it believes the EPA would consider approving.

"We feel like that is a pretty conservative estimate of what it will cost to fix the system," Martin said. That being said, trying to project construction costs over 13 years — including costs for steel and diesel fuel — "that's hard to do," he said.

When the EPA approves the first remedial plan, the council and the administration will begin to discuss how much to raise rates immediately and to project rate increases for the future, Martin said. "We don't begin to pay for the projects until EPA approves the plans and the schedule for the projects," he said.

Project estimates provided Tuesday were for planning purposes only, Martin said. Actual costs will not be known until each project is bid.

The city's sewer-usage fee now generates more than $40 million a year.

The fee was increased by 50 percent a few years ago, followed by a 35 percent increase. Those funds already are being used to complete four capital projects defined in the consent decree.

At the beginning of the meeting, Mayor Jim Gray told council members that he would try to minimize the price tag for fixing the sewers.

"We must challenge the numbers that are presented to make sure we are getting the best deal for our citizens," Gray said. He said city would negotiate with contractors and engineers as the sewer overhaul project proceeds.

Reach Beverly Fortune at (859) 231-3251 or 1-800-950-6397, Ext. 3251.

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