BY ARZA BARNETT, THE COURIER-JOURNAL Workers with MTN Construction, a Metropolitan Sewer District subcontractor, worked Friday on Jeanine Drive after storm drains were installed.

Public hearing The Metropolitan Sewer District will have a public hearing on its proposed 2004-05 budget, which calls for a 6.5 percent rate increase for sewer and drainage service, at 7 p.m. Wednesday at its office at 700 W. Liberty St. The public also can mail written comments to: Bud Schardein, executive director, Metropolitan Sewer District, 700 W. Liberty St., Louisville, Ky. 40203. The MSD board is scheduled to consider adoption of the budget June 28.

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The Metropolitan Sewer District is proposing a 6.5 percent increase in monthly charges that residential and commercial customers in Jefferson County pay for both sewer and drainage services, effective Aug. l.

The proposed rates are subject to a public hearing and MSD board review, said MSD Executive Director Bud Schardein.

If approved, it would be the third year in a row that MSD's rates have gone up 6.5 percent. The higher rates are required to cover higher operating costs, meet bond obligations, maintain and improve facilities and meet federal water-quality standards, officials said.

Schardein said that if the new rates are adopted, the average monthly sewer charge paid by residential customers would increase to $18.60 from $17.46. Those figures are based on the typical family of four's use of about 12,000 gallons of water a month for washing clothes and dishes, bathing, flushing toilets and watering grass. It does not include drinking water.

In addition, the monthly drainage fee that all households pay would also rise 6.5 percent, to $4.41 from $4.14. The fee generates revenue that MSD uses to clean ditches and to make drainage improvements countywide.

The higher rates have been recommended by the MSD staff and for adoption by the MSD board's budget and audit committee.

The new rates are incorporated into MSD's proposed budget for 2004-05 pending before the board; its new fiscal year begins July 1.

The new budget provides for MSD to spend $75.5 million for operations, up about $300,000 from the current fiscal year. The budget includes increased costs of $629,000 for natural gas and about $220,000 for gasoline in the upcoming year.

But Schardein said those increases are to be more than offset by a $2.2 million reduction in payroll; MSD over the last 11 months has cut about 60 positions, including 19 actual layoffs. "We did not take away any people from front-line service," Schardein said, noting that some of the reductions were due to MSD's countywide sewer-expansion program nearing completion.

The budget contains a five-year plan that calls for MSD to spend $195.8 million on capital projects. Of that, $71.1 million over five years will go for upgrades to treatment plants and for new and rehabilitated sewer lines.

An additional $55.2 million over five years is targeted for water-quality improvements, including projects designed to eliminate overflow and the discharge of untreated sewer water into streams during heavy rains.

Schardein said the projects are being negotiated with state environmental officials who recently filed suit alleging that MSD's consistent overflow during heavy rain was a violation of federal clean-water regulations.

Schardein said the five-year plan for water-quality improvement probably will be the first installment of a 15- to 20-year program designed to bring MSD into compliance with the federal standards. The work is expected to include storage basins and pump stations that will allow MSD, which chiefly has combined sewer and storm-water pipes, to store and divert the flow of sewer water when the sewers become filled with storm water, Schardein said.

The five-year budget also calls for MSD to spend $62.3 million for neighborhood drainage work, including four new major flood-storage basins.

Most of the capital work was previously bonded and will be completed with borrowed money. Some of the revenue from the sewer and drainage fees goes toward the bond debt.

MSD's pending household monthly sewer charge of $18.60 is below the national average that urban customers pay.

The nationwide average for monthly sewer service in more than 200 cities as of May 1 was $20.84, according to the Association of Metropolitan Sewerage Agencies. The highest monthly charge was $36 in Atlanta. Among other cities in the area, in Lexington the charge was $16.52; Indianapolis, $19.56; Cincinnati, $30.83; and Nashville, Tenn., $32.28.

Jay Blanton, spokesman for Louisville Metro Mayor Jerry Abramson, said the administration thinks the 6.5 percent rate increase is reasonable.

"For the first time, we have a comprehensive, strategic approach to addressing the most pressing drainage problems in our community," he said. Correcting drainage problems takes resources, and MSD has taken steps to increase efficiency, Blanton said.