In 2017, the Metropolitan Council will increase charges to municipal customers for wastewater collection and treatment an average of 5.4%.
The rate hike is largely due to additional debt service, which recently has been driven by increased rehabilitation of large, aging sewer pipes, according to Ned Smith, Finance Director for Metropolitan Council Environmental Services (MCES).
Despite the increase, the average retail customer in our seven-county region will still pay about 40% less for wastewater collection and treatment than peer regions across the country, Smith said.
“We invest wisely in our infrastructure, and we are aggressive about preventative and predictive maintenance,” Smith said. “We are also laser-focused on cost-efficiency and are always looking for ways to maximize productivity.”
MCES will also use about $1.3 million in reserves in 2017 to help minimize the municipal rate increase.
The Council approved the Municipal Wastewater Charge and other charges related to wastewater collection and treatment on July 27. Setting the rates now allows communities time to set their 2017 budgets. MCES is sending rate letters to each customer community in August.
While the total that MCES charges to municipal customers is increasing 5.4%, local governments will see a varying rate hike depending on their total flow in relation to other communities as measured in 2015.
Customer forums add transparency to rate-setting process
Communities got their first look at the proposed rates at two forums in May. But even before that, MCES held a financial forum in March to explain how the division builds its budget, what the components are, and how capital projects are chosen and prioritized.
“We got great feedback at the forum,” Smith said. “The more people understand how we set our budget, the more they understand the drivers of the rate increase. Communities encouraged us to continue to be transparent about our budgeting and rate-setting process.”
SAC fee will see no increase for third straight year
For the third straight year, the sewer availability charge (SAC) will not increase, thanks to recent economic growth, Smith said. SAC pays for the reserve capacity that has already been built into new pipes and the treatment plants to accommodate future growth. One SAC unit, the basic charge for a new single family home or its equivalent, is $2,485.00.
Another bright spot in the 2017 budget is that the Council, using its general fund levy, will provide $2 million for grants to local governments for projects that demonstrate best practices in water reuse and stormwater management.
The Council also approved rates related to industrial wastewater. Some rates were held flat or were increased minimally. Others were trimmed back from what was originally proposed in May. For example, a proposed increase for haulers of septic waste was reduced while MCES evaluates how changes in infrastructure for receiving hauled waste have impacted costs.
Regional wastewater collection and treatment is paid entirely through user fees, with no taxes levied to support it. In addition, MCES revenue is not used for other Council programs.