Jefferson City's Public Works Department is looking at how to pay for almost $44 million in capital projects, with two potential options leading to some increase in residents' wastewater bills.
Public Works Director Matt Morasch presented the two options Thursday to the city's Public Works and Planning Committee. Both options would increase rates for customers, but to differing amounts.
The first option, a pay-as-you-go plan, would have one increase of $20-$25 a month every couple years and would result in a higher total at the end of the sewer projects.
The other would start yearly increases of about $2 a month and have the need to issue bonds and/or borrow capital funds for the projects.
The department has a list of projects that need done totaling just short of $44 million. Of the list, $17.65 million in projects are priority one, which includes replacement for the Westview pump station; Holts Summit meter replacement; St. Mary's Boulevard sewer replacement; and "biosolids," which pertains to the processing plant.
Additional projects include two pump station replacements, six sewer replacement or relief sewers, and pipelines.
The barrier to getting this work done is funding, Morasch said.
"We only have about $260,000 in our capital budget because we don't have the capacity to borrow money," he said. "That's how we would typically go about doing capital needs."
The last time there was a wastewater rate increase was 2017, Morasch said. However, that "can become problematic," he said.
The district should have an incremental increase yearly to keep up with costs, he said.
The budget - which Morasch said is about $12 million - goes into four areas. About half, he said, goes into bond. The rest goes to collection, treatment and capital expenses.
A person's bill is determined based on a flat rate and water usage.
Within Jefferson City limits, the flat rate is $11.33 a month. The flat rate is double that at St. Martins and triple outside of city limits, Morasch said.
The rate per water usage is roughly $3.42 per 748 gallons.
For instance, if somebody within city limits uses 4,400 gallons of water in a month, their sewer bill would be $31.52 for that month.
Morasch estimated most people within city limits pay around $30-$35 a month currently.
The rates for industrial and commercial properties are the same as for residential, Wastewater Division Director Eric Seaman said.
Based on the average Cole County income of $60,000, a consultant recommended rates of more than $100 per month, Morasch said.
None of the plans Morasch discussed Thursday would have rates reach $100.
One, a pay-as-you-go option, would have users within city limits reach about $75 per month by 2027, which Morasch said is higher than he'd like to see rates go - especially for those outside city limits, which would reach up to $98, according to documents he provided to the committee.
Under that plan, rates would increase to $55.21 in 2022 and remain there until the list of priority one was completed, then up to $75.42 for the priority two list. These estimates are based on an average of 4,400 gallons of water per month.
However, under that plan, areas outside of city limits served by the Jefferson City sewer system would be close to exceeding 2 percent of median annual household income, which the U.S. Environmental Protection Agency defines as an "undue burden on many households within the community." Those areas outside of city limits would include towns such as Holts Summit and Wardsville, which the city provides services to.
For instance, outside of city limits would be estimated at $98.08 a month and St. Martins $86.75 a month.
Morasch's second suggestion would include bonds and/or borrowing capital fund.
Under this option, there would be gradual increases of about $2 a year, which would reach an estimated $43.21 within city limits and $74.21 outside city limits by 2027.
Both estimates are based on an average of 4,400 gallons of water per month.
The next step would be to present to the topic to the City Council in the coming months and recommend a multi-year rate structure to put the city in a position to borrow funds for the projects, Morasch said.
If the city does not complete these projects, it will be in danger of EPA compliance issues, which could force the city to complete the projects in addition to paying fines, which "has the potential to greatly increase rates," Morasch said. It would put a threat on public health and the environment by creating backups and overflow issues, he added.
The committee did not take action on the issue Thursday.
Updates on roundabout, stormwater projects
In other business Thursday, the Public Works and Planning Committee heard an update on several projects, including the area of Clark Avenue and East Dunklin Street, where the city had previously discussed and later abandoned the idea of installing a roundabout.
City Engineer David Bange said administration is still looking into what should be done there, exploring a four-way stop and speed bumps.
He said they're waiting to hear back from the Joshua House Church about what the church would be willing to pay in rent for the parking lot there if the city doesn't lose any of those parking spots.
A number of stormwater projects planned for this year include pipe replacements on Major and lsom drives, a new culvert under Norris Drive, and construction of new stormwater system in the area of Douglas Drive and Davis Street. There will also be a pipelining project to rehabilitate a number of pipes including one along Allen Drive.
This article was edited at 10:15 a.m. Feb. 14, 2021, to clarify that proposed rate increases are for the city's wastewater, or sewer, service, which is based on the amount of a customer's water usage.