News Writing

2008 TPA Better Newspaper Contest

First Place D4

The Boerne Star

Sewer rate hike approved

BY DAVE PASLEY

The Boerne City Council has taken a major step down a long, expensive and seemingly inevitable road to expand the city's capacity to treat wastewater.

The council voted 5-0 Tuesday night to raise sewer rates 24 percent. The new rates will be effective Jan. 1. A second reading of the rate ordinance, and a final vote, is scheduled for the next council meeting on Nov. 13.

For a residence with a modest wintertime water consumption of 5,000 gallons per month, the rate increase will translate to an annual sewer bill increase of $74.16 next year.

In addition to the rate increase, the council also simplified the sewer rate structure, dropping distinctions between apartment sizes and creating three commercial classes of commercial customers.

Although the council has not decided how it will increase the capacity to treat wastewater, the city staff has made it clear that something must be done soon, because the existing plant on Esser Road is rapidly approaching its capacity.

Essentially, there are four options, but the cost is the same — at least $29 million. Those options, according to Public Works Director Michael Mann are to expand the existing plant, build a new plant on the existing site, continue operating the existing plant and build a second plant or close the existing plant and build a new one.

Each option has complex tradeoffs. Cutting near-term corners can increase long-term costs and impact the city's stated desire to grow to a population of 25,000. The population goal translates to long-range need for a wastewater treatment capacity of 3.9 million gallons per day, Mann says.

A primary factor that drives rate increases, according to Assistant City Manager Jeff Thompson, is the fact that sewer treatment capacity cannot be added in small increments. A new plant or an expansion of the existing plant must be constructed in increments of roughly 1.3 million gallons.

The city's current treatment capacity is roughly 1.2 million gallons per day.

It is the gap between ratepayers and capacity that makes the expansion of a small sewer system like Boerne's so problematic, Thompson says.

The minimum price tag for a 1.3 million gallon capacity expansion is estimated at $29.1 million. That cost will have to be financed with revenue bonds.

The debt service on those bonds must be paid by the existing sewer ratepayers. Additionally, whatever option the council chooses, there will be an increase in the cost of operating the new or expanded plants.

Tony Bagwell, an economist and rate specialist with the engineering consulting firm HDR, told the city council in workshops last month that financing the debt for an additional 1.3 million gallons of treatment capacity will cost more than $1 million per year.

The current cost of operating the Boerne sewer system, including the financing of current debt, is roughly $1 million.

Bagwell also has told the council that bond investors will require a "coverage" of 1.2 times the bonded indebtedness. He said the fund balance in the sewer fund must also be increased substantially.

"This is going to happen whether we like it or not," said Councilman Bob Manning. "I don't want people to be misled. This is going to be very rude, very ugly."

In an item that was not directly related to sewer rates, but could add new sewer customers, the council voted 5-0 Tuesday to partner with developers Granger MacDonald and Barry Sanditen to oversize a sewer trunk main in north Boerne.

The city's participation in the $1.3 million sewer main will be $200,000.

The council also authorized upgrades to two adjacent sewer mains the Fabra main and the Cibolo main, at an estimated cost of $360,000 and $300,000, respectively.

Thompson said the sewer main improvements in the area would open the area to “much-needed commercial development" and eliminate the need for the Fabra lift station.

Funding would come from unused bond funds, Thompson said.