April 22, 2011
Executive calls to keep monthly sewer rate flat in 2012
Continued efficiencies maintain stable rates over two-year period
King County Executive Dow Constantine called for keeping monthly sewer rates stable for 2012 under a proposal sent today to the Metropolitan King County Council.
"In these difficult economic times, it makes sense to keep the rate flat. This proposal will allow us to maintain critical infrastructure, support economic growth and promote environmental health without undue burden to ratepayers," said King County Executive Dow Constantine.
Customers served by King County's clean-water utility will continue to pay the current wholesale rate of $36.10 per residential customer equivalent (RCE) that the County Council adopted in 2010. The rate covers the cost to collect wastewater from 34 local sewer utilities and treat it at one of King County's regional treatment plants in Seattle or Renton, and beginning this summer at the Brightwater plant north of Woodinville.
Under the long-standing principle that "growth pays for growth," the capacity charge for new sewer hookups is proposed to increase by 3 percent as planned, from $50.45 per month in 2011 to $51.95 per month in 2012. The capacity charge on new customers provides funding for the system upgrades and expansions that are required to accommodate growth.
"I am pleased that this proposal will allow us to responsibly operate the regional water treatment system that serves 1.5 million people every day," said Constantine. "We've also made significant capital investments to upgrade facilities and add new capacity. This is a responsible way to anticipate growth as we emerge from the recession."
In addition to providing infrastructure critical to support long-term economic growth, capital projects create jobs that stimulate the economy. It is estimated that for every $10 million the county utility spends on construction, about 140 full-time and part-time jobs are created with a payroll of $5 million.
This economic boost comes in addition to the cumulative $1.2 billion in direct construction spending on the Brightwater project from 2006 to 2010, which created close to 3,800 full-time and part-time jobs per year with an average annual payroll of over $88 million.
The proposed sewer rate would ensure the continued ability of the Wastewater Treatment Division (WTD) to safeguard public and environmental health, meet regulatory requirements, and protect the strong credit ratings that help keep down the cost of planned borrowing needed to fund capital improvements.
The Executive's rate proposal directs WTD to commit to future operating efficiencies of more than $4.7 million between 2012 and 2014 to further manage rates, following several years of heavy borrowing to fund the construction of the nearly completed Brightwater project.
Other cost containment strategies include deferring non-critical capital projects to future years and maintaining current staffing levels even as new facilities such as Brightwater come online. The Executive is also proposing the use of a rate stabilization reserve fund established in 2005, which allows the deferral of some operating revenue into future years.
King County's adopted wastewater budget for 2011 includes about $288.8 million in revenue from the monthly sewer rate and about $40.2 million in revenue from the capacity charge. The 2011 budget also includes about $5.3 million from investments and about $7.8 million from other income such as fees for industrial waste, sewage removed from septic tanks, and rate stabilization funds.
For 2012, the first full year of operation for the Brightwater Treatment Plant, WTD's operating expenses are expected to be $116.3 million, an increase of $5.2 million or 4.7 percent over the 2011 budget. The new Brightwater operation is expected to account for about $3.3 million or 63 percent of that increase.
According to the most recent Brightwater cost trend report, which also transmitted to the County Council today, the lifetime cost estimate for the project is currently estimated at $1.849 billion, which remains consistent with the estimates prepared by R.W. Beck, the independent oversight monitoring consultant that reports to the King County Council. When inflation is factored in, Brightwater costs are within 3.3 percent of its target budget established in 2004.
This release is also posted on the Web site for the Department of Natural Resources and Parks at http://www.kingcounty.gov/environment/dnrp.aspx
Note to editors and reporters: Visit the WTD Newsroom, a portal to information for the news media about the Wastewater Treatment Division, King County Department of Natural Resources and Parks: http://www.kingcounty.gov/environment/wtd/Newsroom.aspx