Storm water drainage, sewage treatment, trash disposal, drinking water delivery. These are the unglamorous underpinnings of any city. And in Seattle they’re about to get more expensive.
If the utility makes no operations changes, the average bi-monthly household bill would increase from $325 in 2015 to $422 by 2020. That's a jump of about $16 per year, according to a study SPU conducted last year. That study was part of SPU’s effort to develop a “strategic business plan.” Coming up with the plan involves of scrutinizing expenditures, looking for efficiencies and gathering customer feedback. When it's finished, the plan will help guide the utility’s priorities and rates in the coming years.
During February and early March, SPU will hold a series of public meetings, offering customers a chance to weigh in on the strategic plan, how they’d like to see the utility spend its money and which services they think could be cut back to keep the rate increases lower. SPU’s 2014 budget is roughly $925 million and is funded mostly through revenue from its retail and wholesale customers.
“My goal is, at the end of the day, we’re going to come in with a number that’s lower than 4.7 percent,” says SPU director Ray Hoffman. “We’re looking at reductions that would not impact the level of services appreciably.”
The utility charges customers separate rates for water, sewer services and garbage, recycling and yard waste pickup. SPU also charges property owners drainage fees, which pay for maintaining the city's storm water infrastructure. The fees are included as an item on King County property tax bills. The 4.7-percent figure factors in increases across all those individual rates.
A nine-person “customer review panel” began working on the new SPU business plan last April. Panel members include representatives from the Fremont Chamber of Commerce, the Seattle Fairmont Olympic Hotel, Nucor Steel, Seattle Housing Authority, a local real estate firm, an economics professor and a retired civic engineer.
Inflation tied to operations and maintenance, which includes labor costs, accounts for about 53 percent of the projected rate increases. Other big drivers are a roughly $500 million spend on sewage infrastructure upgrades, yearly payments to King County for wastewater treatment and nearly $180 million to rebuild transfer stations.
The sewage upgrades are largely the result of a consent decree SPU signed last year with the Environmental Protection Agency and the state Department of Ecology. Under the agreement, SPU has to make the investments in order to reduce sewage and storm water overflows into lakes, creeks and Puget Sound.
Wastewater treatment bills from the county cost SPU about $130 million annually, according to the utility's most recent Drainage and Wastewater Fund Rate Study. SPU and some of King County’s other wholesale wastewater treatment customers are getting ready to discuss possible changes to their contracts, which could lower costs.
The payments to King County are "the single largest line item in our wastewater bill,” says SPU's Hoffman. “As their largest customer I think they need to pay attention to what our needs and interests are.”
When the business plan is completed later this year, SPU will deliver it to the City Council and the Mayor’s Office. The Council and the Mayor approve the city’s utility rates.
“Nobody likes to see their bills go up,” says Hoffman. “Our first goal is to make sure [customers] can provide us with their perspective on how we should be spending our money.”
A schedule of the public meetings at which the utility's strategic plan will be discussed can be found on SPU's website. The first meeting is February 5.
Faucet photo courtesy of Steve A Johnson/Flickr.