1. Sewer User Rate Increase PUBLIC HEARING
Report to Council, November 3, 2008

2. Sewer User Rate Increase
October 6, 2008 City council set a public hearing to consider adopting a resolution amending the sewer user rates.
October 17, 2008 a notice announcing the rate increase and date of the public hearing was mailed to all sewer users.

3. Sewer User Rate Increase
The increase will be the first in 8 years:
Customer Class
Effective 01/01/2009
Effective 01/01/2010
Effective 01/01/2011
Effective 01/01/2012
Single Family Residential:
Semi-Annual Billing Increase
$3.44
$3.64
$3.77
$4.03
Percentage Increase 5%
Multiple Family Residential
Commercial
Restaurants
Hospitals
Schools
Industrial
Mailed Public Hearing Notice
At the end of 4-years, the total residential
rate increase will equal $14.88
Current rate = $68.99 every 6-months
Future rate = $83.87 every 6-months

4. Sewer User Rate Increase
Montana Monthly Rate Comparison
Source: 2007 AE2S
North Central Utility Rate Survey

5. Sewer User Rate Increase
Headworks Upgrade $6,700,000
Collector System Completion $4,400,000

6. Sewer User Rate Increase
2008 Facility Plan Update Established 20-year Capital Improvements Recommendations:
Council heard a presentation about these on April 30, 2008.
Headworks Replacement:
Aging equipment replacement.
Technology upgrade to improve downstream plant operations and maintenance.
Cost-effective odor control improvements.
Hydraulic capacity increase for 20+ years.
Montana Department of Environmental Quality required influent flow metering.
Replacement now is more cost effective than upgrades followed by replacement in 8-12 years.

7. Sewer User Rate Increase
Collector Systems:
Rattlesnake Neighborhood collectors (only remaining neighborhood without sewer under the Voluntary Nutrient Reduction Program)
Opportunity
Two (2) sewer revenue bonds sunset in 2012.
2012 increase may not become necessary.
Will know before 2012 if increase can be dropped.

8. Headworks Upgrade Project
Existing Headworks

9. Existing Headworks 25 year old technology
Limited expansion capabilities
Expensive to manage odors

10. Existing Headworks Equipment age and corrosion must be addressed
Open channels and bins complicate odor control

11. New Headworks FEATURES
Technology upgrade to improve downstream plant operations and maintenance.
Cost-effective odor control improvements.
Hydraulic capacity increase for 20+ years.
Montana Department of Environmental Quality required Influent flow metering.
$ 6.7 million budget.
New Headworks
Location

12. Sewer User Rate Increase Q&A
Q – What are the sewer user rates used for? What happens to our dollars?
A – Operations and maintenance (O&M) of the entire facility, replacement and depreciation (R&D) and bonded debt coverage (Debt).

13. Sewer User Rate Increase Q&A
Q –Why 5% per year? That's too much.
A – There hasn't been a rate increase for 8 years due to annual growth of new customers. Missoula has one of the lowest user rates in Montana.

14. Sewer User Rate Increase Q&A
Q - Developers should pay costs to install new sewer lines.
A – New development pays 100% to extend new sewer lines that serve the new development. Additionally new connections to the sewer line pay the sewer development fee. This sewer development fee is the fair share contribution of using the existing sewer facility. The City uses this fee revenue to help pay for expansion of the treatment plant and sewer collection system.

15. Sewer User Rate Increase Q&A
Q – Why wasn't this done with the last upgrade?
A – The Facility Plan identified multiple headwork's projects to be done after the upgrade. These projects were to be done over 10-years. The City is reducing costs by bundling the projects. One of the projects is the influent flow monitoring, which is required in our 2006 discharge permit. Another project is the odor control that has become a forefront issue as development gets closer to the treatment plant. A further project was identified after operating the new plant for a few years. It was discovered there is a need to increase removal of incoming debris to optimize treatment and protect the plant equipment.

16. Sewer User Rate Increase
City Clerk's report about written comments received from citizens.