Sewer rates in Seward have increased 15% for the second year in a row in an effort to pay for a new $32 million wastewater treatment facility.
“This is the largest capital project we’ll undertake for the foreseeable future,” Seward City Administrator Greg Butcher said at the city council’s Oct. 3 meeting.
The council passed an ordinance increasing wastewater rates by 15% and electric rates by 3%. Both will begin with the October billing cycle.
The council also gave a 3.5% cost of living increase on all employee salaries.
All three increases were accounted for in the city’s fiscal year 2023-24 budget, which it approved Sept. 29 after two public budget hearings.
The wastewater plant is the largest factor in the city’s significant overall budget increase this year.
The increased wastewater revenue from last year and this year will be set aside in a sinking fund and used to pay for the new wastewater facility that is in the last stages of design.
Butcher said last year’s increase generated about $285,000, and this year’s 15% is expected to bring in about $580,000, totaling just short of $1 million in the sinking fund.
“We’re making sure we have the appropriate cash on hand into the future to cover bonding and debt financing,” Butcher said.
He said residents will continue to see proposed increases in the coming budget years to help pay for the facility.
“At the end of the day, we have to get to the point where we can afford the operation and maintenance of the facility and the debt payments that are going to be coming down the line,” he said.
The city is projected to reach capacity on its current wastewater system in March.
That could trigger a state mandate for a new facility, or the state could prevent Seward from expanding housing or commercial development until wastewater capacity is increased.
Butcher said the city is trying to avoid such a mandate by being proactive.
“The state is fully aware of where we are at every time, so when we started expanding residentially, commercially, industrially, we were always having a conversation. We’ve been ahead of the curve,” Butcher said. “What a lot of communities do is they wait ‘til they go off the cliff and they’re just violation after violation...We’re going to hit that point, potentially, sometime in the future if stuff isn’t done. We’re moving forward down the path they would have forced us to go down anyway.”
The wastewater system handles everything from toilet waste to what drains down the kitchen sink to rainwater running down the street.
As the community grows, that system has more to handle.
The plant was built in 1959, when Seward’s 20-year projected population was much less.
It saw significant upgrades in 1977, but it hasn’t had many updates since.
Ultraviolet disinfection components were added in 2010 to disinfect the water before it dumps into the Blue River, but those components are in a floodplain and need to be raised up.
Some of the components still use 1959 technology.
Butcher said the wastewater project has been on the city’s longterm plan since before he joined the city in 2018.
At that time, City Engineer Mike Oneby said, the cost was estimated at $16 million. In 2019, that estimate increased to $19 million.
In 2022, it was at $25 million, and now it sits between $32 million and $38 million.
“Costs effectively have doubled for infrastructure projects in the past two to three years,” Oneby said.
It has taken that long just to design the facility. Construction is expected to take another couple of years.
Mayor Josh Eickmeier said the city has been raising rates in small increments over time to avoid a large jump all at once, but the increments haven’t kept up with increasing costs.
“We were trying to budget accordingly, thinking that those numbers were what our target numbers were going to be,” Eickmeier said. “Unfortunately, with COVID and all of the supply chain issues and the strain on the supply chain that’s still out there, the demand for projects with the influx of federal dollars, all these things created a perfect storm.”
He said the city continues to look for federal and state grants to help offset the cost. Such grants have been plentiful the past few years for drinking water, but not wastewater.
“They’re not as common as they are for other types of infrastructure,” Eickmeier said. “So, we’ll hope for the best and plan for the worst.”
Council member Jessica Kolterman said approving the 15% rate increase will allow the city to move forward and avoid state fines.
“These are things that have been considered for quite some time,” Kolterman said. “We’re not just doing this for the fun of it. There is a reason behind it that it has to be done to keep us in compliance with the law.”
The wastewater facility is nearing the end of the design phase, and Butcher said construction could begin in the fall at the earliest if all funding mechanisms are in place.
The 3% rate increase for electrical utilities will assist with the planning and construction of a new $2 million electrical substation, as the city continues to see residential and industrial growth.
“That continues to stress the system,” Butcher said.
Additionally, the 3.5% increase in salaries is to keep pace with the cost of living as inflation continues to rise and keep the city competitive with other communities its size.
