More increases planned in future
Sewer rates in Platte City are on the rise, and likely will be for years to come, according to city officials.
A five percent sewer rate increase for city sewer system customers will take effect Oct. 1, after the rate increase was approved this week by the Platte City Board of Aldermen.
The rate hike reflects the city’s plan to increase revenue to support a 2024/25 wastewater treatment plant expansion project.
The rate increase is part of a series of planned incremental rate hikes rather than an single much larger rate change in 2024, says DJ Gehrt, city administrator.
Gehrt says the city’s wastewater fund continues to face both short and long term financial challenges, with a Platte River Bank stabilization project, completion of a sewer relining project, and the treatment plant expansion project on the horizon.
“Staff anticipates the need to continue the series of annual five percent increases in wastewater rates through 2024 to prevent a steep rate increase–rate shock–in 2024-25,” Gehrt said this week.
The city’s existing wastewater system continues to require extensive annual capital replacement and renovation, Gehrt said.
Over the past five years, wastewater capital renovation projects have included north interceptor replacement, south interceptor relining, replacement of individual components at the wastewater treatment plant (three lift station grinder pumps, headworks reconstruction, lift station control replacement, sludge press building), adding a UV effluent disinfection system, relining approximately 5,000 linear feet of clay pipe each year and construction of two lift stations east of I-29.
City officials say current sewer rates are not sufficient to build capital reserves and debt service revenue streams for the 2024/25 WWPT project.
Beginning in 2019, the city initiated incremental five percent annual wastewater rate increases rather than waiting until much steeper rate increases are required in 2024.
A 2014 rate study conducted for the city by the engineering firm of Shafer, Kline and Warren identified the need to adjust the city’s water and wastewater rate structure to recover a greater percentage of fixed costs in the minimum charge, combined with a reduction in the percentage of fixed costs included in the volume fees that are charged for each thousand gallons of metered usage.
Gehrt emphasized the city has elected to incrementally adjust its rate structure over a period of time rather than approving a significant one time rate revision. The mechanism to implement the incremental rate change is to assign a greater proportion of the rate increase to the minimum use charge while allocating a smaller proportion to the volume use charge. Repeating this process over time will eventually allow the city to reach a “crossover” point where the minimum charge revenue is enough for the city to consider reductions in the volume use rate, according to the city administrator.
Gehrt said the five percent sewer increase results in an annual revenue increase of about $45,000.