Clean Water Advocacy - Newsroom - AMSA in the News
Sewage Rate Hike Needed? Here's the Math Behind It
By Blake Anderson
Blake Anderson is general manager of the Orange County Sanitation District.
July 27, 2003
The Orange County Sanitation District's sewers and regional sewage treatment
plant facilities are vital to the well-being of everyone. They provide reliable
service for our homes and businesses, to protect public health and to preserve
the ocean environment.
During the next 20 years, the Sanitation District will spend $2.4 billion to
rehabilitate, upgrade and add sewage pipes, pumps, systems and facilities, all
the while maintaining our two treatment plants, which cover more than 100 acres.
These are sprawling, complex facilities that demand the attention of engineers,
technicians, mechanics, operators, warehouse staff, laboratory staff, computer
technicians and other support staff.
Most people do not think about what happens after their toilets flush. When they
do, it usually means that the district isn't doing its job. Sewer pipes and our
two sewage treatment plants should be invisible to most folks. But as you can
probably imagine, without them working reliably 24 hours a day, the quality of
life and the environment around us would be much different. Systems wear out.
And as they do, we must maintain them during their useful life and replace them.
There are half a million minutes in a year. During each of them, our facilities
are operating. We monitor them to make sure things are OK. We employ stand-by
pumps and systems that activate the minute there is a problem. And our staff
repairs equipment as it ages. They also stand ready for emergency repairs if
necessary.
It costs money to keep our systems going. Next year we will spend $12 million to
treat the sewage, control the odors, disinfect the effluent and condition the
waste products that are trucked to agricultural sites in California and Arizona
at a cost of $10 million per year. We generate most of our own power using
methane gas that is produced during the sewage treatment process. That saves us
having to buy electricity, but producing the power requires large generators
that must be maintained and operated. And, of course, the sewage treatment
processes themselves require round-the-clock attention by our staff. All told,
our operating costs next year will be $77 million.
We are doing more this year than in past years. Last year we began disinfecting
our effluent, began the move to full secondary treatment and committed to
co-funding the nation's largest water reclamation plant with our partners in the
Orange County Water District. Two years ago we began studying new ways to manage
our waste products. Three years ago we began to treat urban runoff. These
programs signal increased operating costs and increased construction costs.
Some people have criticized our reserves as excessive. They suggest that we
spend them first. That wouldn't be prudent. Our reserve policy is regularly
amended by our board of directors with an eye toward accomplishing several
things. It provides construction reserves for the work ahead, emergency reserves
for earthquakes and other unanticipated events, and interest income that can be
used to reduce rates. It also gives Wall Street reason to assign us an excellent
credit rating that translates to lower interest rates. That's important because
we will borrow $1.6 billion in the next decade.
We also need operating reserves to cover our cash flow demands during the
six-month dry-period cycle because our fees are collected as a line item on our
customers' property tax statements. Many other agencies resort to short-term
borrowing to cover this period. We don't have to, which saves money for our
ratepayers.
The board recently approved a new rate that will push the average bill for a
single-family home from $87.50 per year to $100 per year. That's a $12.50
increase, or little more than a dollar a month. By 2008, with annual
reevaluation by our board, sewer fees may increase to $175 per year or $14.58
per month, double today's rates.
How does that compare with other agencies like ours? Nationwide, according to a
2002 survey by the Assn. of Metropolitan Sewerage Agencies, the average rate was
$244 per year. I will leave it up to you to decide whether our rate compares
favorably with that figure. For more information on sewer fee increases, go to
http://www.ocsd.com.