Sewer rate adjustment to be considered by Cape

Thursday, February 7, 2013
Crews work on the foundation for Cape Girardeau’s $55 million wastewater treatment facility Wednesday afternoon. (Laura Simon)

A completed foundation for Cape Girardeau's new $55 million wastewater treatment plant will set the wheels in motion for sewer rates to be re-evaluated in coming months.

City engineer Casey Brunke said pilings for the plant's foundation are about 75 percent complete and should be finished by the end of the month.

Completion of this phase means a consulting firm, Jacobs Engineering of St. Louis, can better estimate data it will use in a sewer-rate study, said public works director Tim Gramling. The study could take several months to complete and is meant to guide the city in setting sewer rates. The engineering firm is the original designer of the plant.

City manager Scott Meyer said factors considered in the study include construction and operational costs estimates for costs associated with inflation, overhead, labor and usage. Cash flow from capital improvement sales tax revenue also is considered.

Cape Girardeau voters in 2011 approved two measures to partially fund construction of the wastewater treatment plant, which is the largest capital improvement project in the city's history -- an extension of a quarter-cent capital improvement sales tax and a proposition that authorized $72 million in bonds. The sales tax was planned to be used to repay the bonds, but the city has turned to the use of state revolving fund loans.

Meyer said the city hasn't yet raised the flat-fee per month charged to sewer customers to the maximum level, and he hopes that situation can continue. The fee in 2011 was raised from $4.50 per month to $13.19 per month. The fee could go up to $16 per month. The rate for water usage was raised the full amount allowed, from $1.35 to $3.

"It's certainly our goal not to implement the whole thing," Meyer said.

Whether sewer rates could decrease as a result of the study is unknown. Rates could go down if construction costs end up much lower than projected. The city already is seeing savings within the first phase -- Brunke said costs are about $100,000 lower than projected -- that is not a lot in the $55 million scope of the project, but a start, she said.

Plant operational costs also will affect the city's ability to adjust sewer rates, according to Meyer. The rate study should produce a look at that cost, he said.

"You don't know, really know, until you get it up and running for a year's time," he said, "but we are going to do what we can. Once we have that data, we'll be able to re-evaluate and say, 'we can do it now, or not,' and we are certainly doing our best to not have to raise the amount if we don't have to," Meyer said.

The interest rate on the first loan the city is using on the plant is set at 2.43 percent, according to city finance director John Richbourg. The rate is about 1 point less than the city would have been subject to using general-revenue bonds.

The city broke ground on the plant in September. It is scheduled to be complete in August 2014.

The plant will be able to process an average flow of 11 million gallons per day and a peak capacity of 50 million gallons per day. Its use will bring Cape Girardeau into compliance with federal and state wastewater treatment regulations. Evaluations of the city's wastewater treatment system by the Missouri Department of Natural Resources required a new plant.

eragan@semissourian.com

388-3627

Pertinent address:

401 Independence St., Cape Girardeau, Mo.

2007 Southern Expressway, Cape Girardeau, Mo.

Map of pertinent addresses

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