Sims proposes no increase in 2006 monthly sewer rates

April 14, 2005

Sims proposes no increase in 2006 monthly sewer rates

People will see no change in their monthly sewer bill next year in a proposal from King County Executive Ron Sims that was sent to the King County Council today.

"We can maintain stable rates for the second consecutive year because the county's wastewater treatment utility once again held the line on costs," Sims said. "And it did that through sound management and oversight and employee diligence to productivity."

In a proposed ordinance, Sims reconfirms his agreement with the County Council to continue through 2006 the monthly sewer rate of $25.60 and a capacity charge of $34.05. All sewer customers pay a monthly sewer rate for operating and improving the sewer system. To help pay for building new facilities, King County levies a capacity charge on new connections to the system.

"Multiyear rates present challenges in times of economic uncertainty," Sims said, "And the county's Wastewater Treatment Division has responded to these challenges."

Under its long-term contracts with local sewer agencies, King County must adopt the 2006 sewer rate by June 30 this year. The county wastewater utility protects public health and water quality by serving 1.4 million people in 17 cities, 16 sewer districts and the Muckleshoot Tribe.

"We developed these rate proposals following the county's adopted financial policies for the wastewater utility - continuing our commitment to rate stability, predictability and equity," Sims said. "The proposals also provide the revenue and debt service coverage needed to preserve the utility's credit rating, ensuring access to capital markets to meet our capital needs."

King County charges each agency a monthly amount for providing wastewater treatment. That amount is based on King County's monthly sewer rate and the number of customers served by the local agency.

In turn, the local agencies bill residences, businesses and industries in their wastewater collection system to recover the county charge plus the amount needed to operate their local systems.

For its long-term multimillion-dollar construction program to expand, rehabilitate and build new wastewater facilities, King County borrows funds by selling revenue bonds. It pays off the bonds through current and future sewer rates and charges.

"Thanks to our prudent financial policies, our high revenue bond ratings were recently reaffirmed by both Moody's and Standard & Poor's, the nation's two premier rating agencies," Sims said. "Continuing our favorable debt ratings is essential to keeping down costs of the planned borrowing needed to finance the Regional Wastewater Services Plan."

Sims explained that essential for keeping the stable sewer rate for 2005 and 2006 is a rate stabilization reserve, which allows deferring some operating revenue from 2005 to 2006.

Besides covering the cost of operating and maintaining the regional wastewater system, the county sewer rate helps pay for adding capacity to the system, including the new Brightwater Treatment System. It also pays for rehabilitating pump stations and pipelines in the 40-year-old system so they continue to operate reliably.

In addition, the sewer rate helps pay for King County responsibilities that include controlling combined sewer overflows and cleaning up contaminated sediment in the Duwamish River and Elliott Bay.

King County's wastewater utility serves more than 1.4 million residents - from Mill Creek, Mountlake Terrace and Brier in Snohomish County, most urban and suburban areas in King County, and a small area in northeast Pierce County. Formerly known as Metro, the regional utility has been preventing water pollution for 40 years.