HomeMy WebLinkAbout11-25-13 UtilitiesUTILITIES NOVEMBER 25.2013 5:26 P.M.
Committee Members Present: Valerie Schey, Henry Davis, Oliver Davis, Karen White
Other Council Present: Tim Scott (AB), Dr. Fred Ferlic, Dr. David Varner, Gavin Ferlic,
Derek Dieter
Citizen Members Present: Carol Davis
Others Present: Mark Neal, John Murphy, Eric Horvath, Kathryn Roos, Kathy
Cekanski - Farrand, Erin Blasko, Jennifer Wilson —Crowe Horwath
Agenda: Bill 64 -13 Sewer Rates thru 2017
Valerie Schey, Chair of the Utilities Committee led a half -hour discussion of bill 64 -13. The bill submitted
by the administration would incrementally raise sewer rates by approximately 9% annually, through
2017.
While this was not the first time the Council was made aware of the proposed increases, it was this bill
that would actually raise the rates.
Eric Horvath, the Director of Public Works made the ease for the increases. Justification for the level of
increases and duration was supplemented by Jennifer Wilson from Crowe Horwath who the City
contracted for the financial analysis.
Eric began by recounting the mandate from the EPA (Environmental Protection Agency) to separate the
City combined storm /sanitary sewer system. Overflows of untreated sewage to the St. Joseph River
during wet, high -flow conditions mandate the separation project. The cost, over years, running to
hundreds of millions of dollars need to be paid for by the issuance of bonds supported by the proposed
rate increases.
The following Council reaction to Eric's explanation focused on the needed scope and pace of
conforming to the mandate. Councilman David Varner questioned the acceptance by the City to embark
on a project exceeding mandate requirements. He advocated doing minimum compliance hoping to
renegotiate the terms at a later date. Other councilmembers expressed deep reservations about the
increases and the ability of customers to absorb them. Valerie Schey wondered if costs associated with
a separation project like those for new street lights and landscaping could be foregone to lower the
costs.
Oliver Davis worried about inflation factors over years would outpace the $460+ million projections.
Others including Dr. Varner expressed dismay at the Council not being a part of earlier compliance
negotiations. Henry Davis suggested a rate tier structure to the proposed rate increases. This would
charge a higher rate to the largest users. He said failure to do so creates a regressive tax situation
penalizing those who can least afford to pay.
Derek.Dieter summarized the discussion saying with so many unanswered questions the bill should be
continued until January 27, 2014.
Consensus favored this delay before Valerie adjourned at 6:05 P.M.
Re ec ully Submitted,
Valerie Schey, Chairperson
Utilities