BY CHUCK VANDENBERG
WEST POINT – West Point municipal sewer system users could see a sharp increase in their sewer rates in the near future as the city looks at funding options for upgrades to it’s sewer lagoon.
At Monday’s regular city council meeting at the West Point library, city officials heard from Travis Squires, a managing director with Piper Jaffray, a bond consulting firm contracted to help the city navigate funding the lagoon improvements.
Squires presented the board with three options in financing the improvements including a rate increase, a general bond issue, or a hybrid of the two.
After about a 30-minute presentation, the city council agreed that a one-time rate increase would be simplest to explain to residents and not put a burden on the city’s debt limit.
Squires offered the city an original 4-year ramp up of the city’s sewer rate beginning with a 32% increase in 2020 followed by a 16% increase the following year and 15% increase in 2022, with yearly inflationary adjustments following 2022 over the 20 year lifetime of the bond.
City officials approved a resolution for funding not to exceed $1.9 million for the lagoon improvement including engineering, designing, and construction. The funds would come from a state revolving loan fund
“In this case, the revenue increases necessary would be approximately 63% in aggregate split up 32-16-15 and then an inflationary increase thereafter,” Squires said.
But Mayor Paul Walker said he would rather see a one-time increase to cover to the costs of the improvements.
“I don’t have a vote in this, but I would recommend we do a one-time increase,” Walker said.
The 63% increase would take the current $11 minimum charge billed monthly and increase that to $17.60. The sewer rate per 1,000 gallons would go from $5.70 to $9.12/1000 gallons over the 20 years of bond payments.
Squires said the upgrades are projected at a current cost of $1,885,000.
New Iowa Department of Natural Resources requirements are pushing the need for the upgrades to deal with nitrogen levels in treated water being put back into the area’s water table, which were over allowable DNR limits. The new system will also stem e.coli presence, which was still below acceptable limits.
The city agreed with Garden and Associates Engineering more than a year ago to add a Submerged Attached Growth Reactor, of SAGR, to the current lagoon to increase the amount of filtration taking place at the site.
It needs to be operational by December of this year, according to DNR mandates.
Squires said the city needs to keep an eye to upcoming mandates, which could include reducing nitrates in the water, which could require additional upgrades to the lagoon.
“That’s kind of why I didn’t figure this on a 30-year loan because I wouldn’t want to have that in place and then 20 years into when you still have half the principal left to pay on this loan, be hit with another mandated upgrade,” he said.