Posted: 3:48 p.m. Wednesday, Jan. 23, 2013

Water and sewer rates will continue to skyrocket

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Water and sewer rates will continue to skyrocket photo
Jim Witmer
Kenney Linebaugh, operations supervisor at the Greene County Sugarcreek Wastewater Treatment Plant, stands in the secondary clarifier area that was expanded in 2009. Water and sewer rates have increased 55 percent in some area communities in the past seven years, following a trend nationwide brought on by stricter regulations and aging systems. In Ohio, rates have been outpacing inflation for more than three decades, according to information published by a state regulatory agency Ohio Environmental Protection Agency and industry experts anticipate homeowners and businesses will not see stable rates anytime in the near future.
Water Rates photo
This chart shows water rates for various cities in the region, from 2006 through 2012.
Sewage Rates photo
This chart shows sewage rates for various cities in the region, from 2006 through 2012.

By Sharahn D. Boykin

Water and sewer rates will continue to escalate in area communities — some expected to quadruple — in the next decade as governments replace aging facilities, experts say.

Combined rates for the two utilities already have increased up to 55 percent in recent years in some area communities, and others like Greene County are considering price hikes this year.

In Ohio, rates outpaced inflation for more than three decades, according to the Ohio Environmental Protection Agency and industry experts anticipate homeowners and businesses will not see stable rates anytime in the near future.

Newer and more stringent federal and state regulations coupled with growing populations and aging water and sewer systems have forced some public water systems to upgrade, expand or build new systems with price tags in the millions or sometimes billions, according to experts and municipal department heads.

“Sewer and water utilities are big capital infrastructures,” said Ron Volkerding, the Greene County sanitary engineering director. “Those are very expensive. Like anything else, they wear out over time and need to be repaired and replaced. One thing I’ve come to conclude is there’s never going to be enough money. Most of the money has to come from local funds.”

Capital funding needs for water and sanitary sewer systems in the United States are expected to reach $125 billion by 2020, according to the American Society of Civil Engineers. If current funding levels persist, the nation will be faced with a $84 billion funding gap, a report by the group said.

Homeowners and businesses in Middletown will see skyrocketing rates in the future. Federally required sewer improvements expected to cost the city $100 million to $150 million over the next 20 years will force the municipality to quadruple its utility rates, according to Interim Public Works and Utilities Director Preston Combs.

Greene County ($293.98), Springboro ($276.63) and Bellbrook ($274.82) customers paid the highest combined water and sewer charges over a three-month billing cycle in 2012, according to rates examined by the Dayton Daily News from 22 jurisdictions.

Water rates in Springboro increased by 55 percent and sewer by 36 percent in the past seven years, according to data from a regional survey performed by the city of Oakwood. The increases were imposed after the city rebuilt and doubled the capacity of its sewer plant which had a maximum capacity of 2 million gallons per day.

Over the course of a decade, the Springboro population spiked by 40 percent, according to U.S. Bureau data.

“We saw that we were going to be running toward 2.5 million,” said Christine Thompson, the Springboro city manager.

Trash and storm water utilities were reduced in 2011 and 2012 to help residents cope with the increase, Thompson said.

Within the last two decades, Springboro has financed a $20 million sewer plant renovation and a $10 million new water plant construction.

“A great part of our increase was due to Ohio EPA and state regulations,” Thompson said. “The state’s unfunded mandates are difficult to overcome.”

Veeda Whitt, a 76-year-old Springboro resident, estimates she pays anywhere from $60 to $80 per month for water, sewer and trash.

“I think the water is terribly expensive here,” Whitt said. “It sure seems like a lot for one person.”

Thompson said the city will not increase these rates in 2013.

In Greene County, commissioners are considering increasing water and sewer rates. The county expanded its wastewater treatment facility in Sugarcreek Twp. in 2009. The county borrowed $35.5 million to cover the expansion which doubled the facility’s maximum capacity from 4.9 to 9.9 million of gallons per day.

Debt payments on the Sugarcreek facility occurred around the same time the recession hit the nation, said Ron Volkerding, the Greene County Sanitary Engineering director. The department also was faced with a significant drop in tap-in fee revenues.

“We didn’t have the revenue to match our expenditures,” Volkerding said.

While the number of water and sewer customers grew, so did the demand for water.

“If your facility is at a point where demand for water service exceeds capacity, you need to increase capacity,” Volkerding said.

Greene County has experienced a gradual growth in water and sanitary sewer customers since 2006, according to data from the county sanitary engineering office. Overall, water customers have increased by 14 percent and sanitary sewer has increased by 13 percent.

Debt related to capital improvement projects accounts for the largest portion of sanitary engineering department expenditures, according to county data. About 43 percent of water and 64 percent of sewer expenses are attributed to loan repayment.

In 2013, the department estimates water and sewer loan payments will total $17 million.

“We wanted to look at the bonds and see if there was any opportunity for restructuring,” said Tom Koogler, a Greene County commissioner. “The debt service (loans for capital improvement projects) is too high of a percentage of the cost of the operation.”

Lebanon, which has experienced an 18 percent growth in population between 2000 and 2010, according to U.S. Census data, increased its water rates by 6 percent and sewer by 3 percent this year. The rate increases are expected to help cover a $4 million debt the city incurred when it transitioned to the Greater Cincinnati Water Works system.

Dayton has one of the lowest combined water and sewer rates in the region — $162.15.

The city provides water and sewer services for about 400,000 residents within the Dayton and Montgomery County region, according to Tammi Clements , the Dayton water director.

Dayton’s population dropped 14.8 percent between 2000 and 2010, leaving its two water treatment plants with capacity for future customers. The plant produces 96 million gallons of water per day.

“We could serve up to 40 percent more customers with our existing system, without the need to upgrade or expand our plants,” Clements said.

Clements said the water and sewer systems in Dayton are an ongoing investment to make sure the system is well maintained and to keep costs down for customers. The city spends about $20 million per year to maintain its water, sewer and storm systems.

“It is expensive,” she said. “Infrastructure is not cheap to maintain. Dollar for dollar, the current rates people pay for water and sewer is not proportionate to the true cost to actually maintain, repair and upgrade the system.”

Some communities are challenged with making larger investments due to deferred reinvestment into their systems, which triggers rate hikes, Clements said.

Clements said in the past, some communities have kept rates low because of pressure from the general public. Now, as some of the systems age, some of these communities are seeing a substantial spike in their rates.

“Communities deferred maintenance on their systems because their customers saw water and sewer rates as a tax,” Clements said. “They don’t look at water and sewer the same way they look at other utility systems.”

While rates have been increasing over time, Clements said these rates themselves are still low.

“Typically, while some consider water and sewer rates to be high from the customer standpoint, our rates are still low in comparison to the true cost of providing water and sewer services,” Clements said. “Also, water and sewer rates remain lower than what our customers actually pay for other types of similar services. We really do not have rates that fully recover the true cost of providing the level of services provided.”

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