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Water/sewer rates may increase: Intended to defray wastewater treatment plant renovations

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BEMIDJI — The Bemidji City Council is considering raising water/sewer fees to avoid the prospect of the city’s sewer fund sliding into the red. Some of the options for fee increases faced skepticism during the council’s discussion at a work session Monday night, but those in opposition appeared to agree the increases were necessary after hearing more on the rationale behind them from city staff.   

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In a memo to council members, City Finance Director Ron Eischens said the sewer fund was headed for a deficit as early as 2017 if nothing was done to make up for the cost of renovations to the wastewater treatment plant.

Eischens and the city’s Finance Department presented several options to help increase revenue to prevent the sewer fund from running out of money. On the table were two options for water/sewer rate increases: The city could either raise usage and base rates by 3 percent for both regular household use and commercial use, or focus the hike to just the base rates that commercial users pay. As it stands now, the base rate — or the flat rate everyone pays no matter how much sewage or water they use — is the same for both residential and commercial users.

The potential commercial rate increases listed in the memo had the majority of commercial users seeing their base rate go from $14.92 a month combined water/sewer to anywhere from $20.89 a month to $43.27 a month depending on the size of their water/sewer lines. However, the largest lines could see an increase to $313.32 a month.

 Eischens’ memo said raising just the commercial base rates would generate about $220,000 in “guaranteed” revenue for 2014, but raising everyone’s rates 3 percent across the board would only generate $115,000, which wouldn’t be a sure thing since usage could fluctuate.

Eischens said during the meeting that city staff felt the commercial increase would be more effective.

“This is quite a leap,” Councilor Nancy Erickson said at first of the commercial increases. However, when Mayor Rita Albrecht later asked if anyone wanted to speak against the increases, Erickson answered “no, I can live with that.”

The memo also suggested transferring $2 million from the city’s water fund to the sewer fund. The city’s financial system tracks the water and sewer funds as one large fund, so the transfer is simply for cash flow purposes, it said.

Earlier Monday, Mike Forbes, co-superintendent of the wastewater treatment plant, defended the renovations as necessary toward maintaining its high standards.

“We have (a) 99 percent removal rate, so you can’t really get much better than that,” he said. “You can’t keep operating with an old facility, you have to make upgrades … you have to keep it current, because you’re protecting public health and you’re also protecting the city infrastructure.”

Forbes likened the plant — which was originally built in 1985 — to an old house in need of repairs.

“You can’t just let it go to rot. You have to put money in it to upgrade it,” he said. “If you have a 25- or 30-year-old house, you can’t just expect not to fix it.”

Water and sewer usage in Bemidji has steadily declined for the most part within the past five years, according to analysis by accounting firm The PFM Group. However, the city did see a 13 percent spike in both water and sewage last year as a result of the drought.

Eischens said the first public reading of the revised fee schedule would take place at next week’s city council meeting.

Stormwater fees will not increase for 2014, Eischens said.

The first part of the work session was closed to the public as the council received an update from attorney Jim Thompson on the civil litigation case the city is involved in with Bemidji Township.

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