The debate isn’t about whether O’Fallon sewer district rates have to go up. It’s about how much.
At its May 25 workshop meeting, the O’Fallon City Council reviewed three options for potential rate increases, opting to move forward with a plan that will raise rates by about $12 over the next five years to help fund capital projects for the city’s wastewater treatment plant.
In 2015, the city set its rate structure through 2021, but new ammonia discharge requirements handed down by the Missouri Department of Natural Resources forced the city to go back to the drawing board.
Working with engineering firm Woodard & Curran, a 20-year capital improvement plan has been developed and broken into two 10-year periods. Necessary improvements identified in the first period, ending in 2027, include ammonia upgrades and biosolids improvements.
In a presentation to the city council, Water and Sewer Project Manager Chris Horvath, along with representatives with Woodard & Curran, presented three scenarios: a minimum, intermediate and all-projects plan.
The minimum scenario calls for $49.5 million in projects necessary to keep the wastewater treatment plant compliant and operational. The projects include the required ammonia upgrades, estimated at $26 million.
Under the minimum scenario, the average O’Fallon resident’s rate would increase from $18.33 in 2017 to $23.61 in 2022. However, that scenario is not favored by the experts.
“The minimum option we are presenting here from a technical standpoint, we would not recommend. We do give it to you so you can see it for illustrative purposes,” said Jennifer Anders of Woodard & Curran.
The intermediate plan includes additional improvements, totaling $64.3 million, forcing the average rate to rise to $27.43 in 2022. The last option, described as the “all projects” proposal, would fund the full range of recommended capital improvements for the 10-year period at an estimated price tag of $77.6 million. Under the final scenario, rates would rise annually from $18.33 in 2017 to $30.03 in 2022.
While the “all projects” plan comes at a significantly higher price than the other two options, Horvath and Anders stressed that it includes only projects necessary for keeping the wastewater treatment plant operational long-term. Anders said the scenario doesn’t include any “luxury-type” items.
“If you push that $13 million off and you push it off another one, three, five years, those costs are just going to further escalate. It’s not going to go away,” she said. “You’re still going to have to spend the money. It’s going to become more costly to do it and you’re going to carry additional risk during the time you haven’t made that investment.”
Multiple members of the council agreed with those sentiments. Councilmember Tom “Duke” Herwick [Ward 2] said he hates raising rates, but funding all the projects prevents saddling future generations with the costs.
“My feeling is if we keep kicking the can down the road on the rest of that $77 million, that’s irresponsible,” Herwick said. “The systems are going to fail eventually and it’s better to get control of it now.”
Councilmember Rick Lucas [Ward 1] said the capital improvement plan doesn’t include a list of “what-ifs,” but rather just those projects needed to keep the city’s plant functional.
“Sometimes you just have to bite the bullet and understand that the cost of doing business is the cost of doing business,” Lucas said.
Eight members of the council voted in favor of the $77.6 million plan that will raise rates to around $30 per month. Councilmembers Reid Cranmer [Ward 3] and Jeff Schwentker [Ward 4] were opposed.
With the council’s approval, Horvath said the next step is a public hearing.