A $24 MILLION REVENUE BOND ON NOVEMBER BALLOT
In November, voters in the City of Platte City will decide the fate of a $24 million wastewater (sewer) revenue bond measure.
The intent is to rehabilitate and expand the city’s wastewater treatment plant.
The Platte City Board of Aldermen voted this week to put the question on the Nov. 5 ballot.
If approved, bond payments will be generated through wastewater user fees. City officials say the impact on rates is not fully known, as that will depend on the receipt of low interest loans backed by the bonds and any third party funds, such as federal or state grants.
City officials acknowledge that while the final rate impact will depend on the final mix of funding methods, there will be a “significant impact even in the best case scenario,” according to a staff report from DJ Gehrt, who is serving as transition assistant to new city administrator Tom Cole.
It is emphasized that bond approval does not require or mean that the city will actually issue $24 million in sewer bonds. Bond issuance, either in smaller amounts or the full $24 million, will depend on project phasing and whether or not third party funding is available.
Platte City has a history of not using full bond authority if those funds are not needed for the specified project.
BACKGROUND
The city’s current wastewater Treatment Plant (WWTP) was completed in 2000 at a cost of slightly more than $1 million. The plant with a design capacity of 1 million gallons per day (gpd) consists of inlet structures, influent metering, bar screen, two sequential batch reaction (SBR) primary treatment basins, sludge digesters, sludge handling processes, and an ultraviolet outflow disinfection system.
The initial plant design included the ability to increase capacity to two million gpd with the addition of two more SBR basins, an additional digester and improved sludge handling.
City officials say in order to meet current discharge regulations for ammonia, phosphorus and nitrogen, plant throughput has been slowed down resulting in a current daily capacity of approximately 800,000 gpd. Average daily dry weather flows range between 400,000 and 500,000 gpd depending upon the season. Wet weather flows can exceed 1,000,000 gpd and require the city to bypass into the equalization basin before bringing the flow back to the plant as capacity allows.
The plant has a design life of 50-60 years with shorter replacement of dynamic components (pumps, motors, hydraulic arms, control panels) and a mid-life rehabilitation after 25 to 30 years of service.
City officials say the current plant capacity is sufficient for a population of 5,000. The city’s estimated buildout population is 8,500 to 10,000 with buildout expected to be completed between 2035 and 2040, although recent residential development east of Interstate 29 may result in earlier buildout.
In 2016, the city initiated planning and funding structure for a 2025-26 mid life rehabilitation and capacity expansion project to extend the plant life to at least 2055-2060 and increase capacity to support the community buildout population. The planning and funding process included conducting a MoDNR approved qualifications based consultant selection process and starting a series of small, annual wastewater rate increases. Bartlett and West was selected as the engineering consultant for the project and a series of five percent annual rate increases started with the FY 2017-18 budget.
As part of the project preparation the city implemented a series of five percent annual rate increases intended to slowly generate enough additional revenue to fund the wastewater treatment plant project and any debt funding by 2025.
“This component has not been successful as the five percent rate increases did not generate annual five percent revenue increases due to a gradual decrease in annual billed volume and a suspension of the annual increases as a COVID relief measure in 2020 and 2021,” Gehrt wrote in a staff report.
As it became evident that funding would not be sufficient to support a 2025 project, the city contracted with NextGen Strategies to conduct a third party evaluation of the city’s water and wastewater financial and rate structure, Gehrt said.
“Although the city continues to maintain an active capital maintenance program and there is remaining capacity, the city has an approximate five year window (2025-2030) to fund and complete the wastewater treatment plant rehabilitation and expansion project,” Gehrt said.
“Each year the plant continues to operate without rehabilitation and expansion, especially beyond 2030, increases the difficulty of day-to-day plant operation and increases the potential for operational failures or unplanned releases of untreated effluent,” Gehrt added.
The wastewater revenue bond question on the November ballot will require a simple majority for voter approval.
City officials say the ballot language limits the use of bond revenue to the following:
*Rehabilitation, repair, replacement and improvements to the treatment plant.
*Repair and improvements to the Platte River bank to protect the treatment plant and interceptor line.
*Repair, replacement and improvements to the wastewater collection system.
*Acquisition of rights of way/easements for use of wastewater system.
The ballot language also specifies that bond payments will be funded by wastewater revenue, which is generally user fees but can include wastewater revenue derived from general revenue sources if needed, Gehrt said.
