Sewer rate hike in the works
STERLING – In an effort to put away some extra money for a future sewage treatment plant, city sewer rates likely will be going up slightly, starting in May.
City Manager Scott Shumard presented council members with three rate increase options; they chose the middle-level option, which would raise the basic rate from $11.85 to $12.95 and the basic user rate from $3.35 to $3.80.
“We try to put back money every year and steadily increase the rate to avoid the future shock,” Shumard said at Monday’s meeting. “I’m comfortable with the middle proposal.”
So were the council members, who know the current sewage plant will not last forever and will need to be replaced in 8 to 10 years or so.
The cost of a new plant is estimated to be about $35 million at this time. With the rate increase, the city can add about $625,000 to its replacement fund, which was started in 2007 and now has about $5.85 million.
The other options included raising the basic rate to as high as $13 or as low as $12.85, which would have raised user rates $3.85 or $3.65, respectively.
With the proposed increase, which the council must approve along with the rest of the city’s budget, Shumard presented a sewer fund budget that contains about $3.2 million in revenue for operations and maintenance, plus $671,000, which is the $625,000 from the rate increase, plus interest.
Operating expenses are projected to be about $3.2 million.
The new fiscal year begins May 1.