Wastewater reserve capacity system and rate structures to get review

The Metropolitan Council will form a task force to review policies related to reserve capacity costs – also known as SAC (sewer availability charge) rates – in the regional wastewater collection and treatment system. SAC revenues fund capital costs for engineering and construction of the system.

The task force will include officials from municipalities, small and large, and possibly representatives from other stakeholder groups. It will be chaired by Peggy Leppik, who also chairs the Council’s Environment Committee.

Aeration tanks at the Empire Wastewater Treatment Plant

Costs for the wastewater collection and treatment system are allocated among both current users (through charges like the municipal wastewater rates) and future users (through the sewer availability charge, or SAC fee). Pictured here are aeration tanks at the Empire Wastewater Treatment Plant.

The Council decided to create the task force in conjunction with approval of a new SAC fee, municipal rates and other related wastewater rates for 2010.

Rates will increase in 2010, and are still very competitive

The SAC fee, a one-time fee for new connections or increased volume to the regional wastewater system, will go from $2,000 this year to $2,100 in 2010. Municipal wastewater rates, the charge to communities connected to the regional system, will see an average 3.8% increase in next year. That’s less than 1% higher than proposed earlier in the year due to a phase-in plan and other mitigating changes incorporated by the Council.

A dramatic reduction in new development, combined with reduced overall flows to the treatment plants, prompted a review of the methodology used to calculate reserve capacity in the system. Council staff identified an improvement to the methodology and it was incorporated in the rates, starting in 2010. The changes were presented at a public meeting in August.

“What we’re doing is trying to do is make a fair and accurate assessment of how much of the pipe is available for future development,” said Council Member Wendy Wulff. “That’s what this formula change is all about. The fundamental question is how much of that pipe is already allocated for other users and how much is available for new development, and accurately computing and assessing those costs to the [current and future] users.”

Council phases in changes over three years

In response to comments from cities, the Council agreed to phase in the changes over a three-year period instead of two years, and finance some capital costs to keep rates lower. Also, capital projects were deferred to reduce SAC pressures in the future. The task force will look at the new methodology and determine if any further changes are warranted.

“Not only have we listened to constituents and modified the increase, we’ve protected the reserve fund, we’ve cut back on our capital budget, and we are also setting up a task force,” said Council Chair Peter Bell, “and we will continue to get input from them.”

Bell was firm about his commitment to keep the wastewater collection and treatment system self-supported by user fees, without any sort of tax levy.

Council Member Roger Scherer said that despite the rate increases, the Council’s wastewater rates remain among the lowest in the nation. “We’re very efficient,” he noted.