For the past three months, Riverdale has been working on re-aligning its sanitary sewer rates for the coming fiscal year (which starts in July). The City Council is now considering an ordinance change that will allow residents and businesses to have a say in how those rates are set.
The ordinance, which will have its first reading at the May 26, 2020 City Council meeting, establishes a review committee which is made up of residents, business owners and representatives from Arconic, PVCSD and Scott Community College. Their job will be to review sewer infrastructure costs and upkeep issues and to provide recommendations to the City Council on rates and budget expenditures.
It is estimated the committee will only have to meet two or three times a year. If you are interested in serving on the committee, please email the mayor.
Re-Structuring the City’s Sewer Fund
The Mayor has been working with the City’s accounting firm, BFA, to build a more comprehensive financial model to project Riverdale’s sanitary sewer expenses now that it has become part of the consortium of cities that jointly owns the trunk sewer line extending from Panorama Park to west Davenport (where the waste treatment facility is located).
“Our responsibilities as a co-owner of the waste treatment plant and the main trunk line that serves us means we all need to make sure our sewer fund has enough money in it to manage the on-going operational costs and improvements needed from time to time in that facility,” explained Mayor Bawden.
But the overhaul of the City’s Sewer Fund was needed for more reasons than just the costs associated with the joint sewer service with Davenport, Bettendorf, and Panorama Park. “We also needed to start allocating overhead and engineering costs for the sanitary sewer to the sewer fund,” explained the mayor. “Historically, Riverdale has been covering those costs out of its General Fund and that’s not really appropriate. Those costs are sanitary sewer related, so they should be paid with user fees and not property taxes.”
The difference is slight, but it is there. Not all residents in Riverdale are on the sanitary sewer system and, as a result, don’t pay sewer fees.
In addition to the costs of the jointly-owned sewer utility and overhead, the financial model built by BFA also includes capital investments and sanitary sewer rehabilitations currently scheduled for the next 3 to 6 years as Riverdale moves proactively to eliminate I&I (inflow and infiltration) from their portion of the joint sewer system. Failing to do successfully eliminate I&I from the lines could be financially catastrophic not just for Riverdale, but for all of the cities in the partnership.
“The Iowa Department of Natural Resources has a multi-million dollar order ready to hand down to Davenport, Bettendorf, Riverdale and Panorama Park if we don’t ge the I&I situation under control and reduce the amount of relatively clean water that flows through the waste treatment plant at peak times,” said Mayor Bawden. “Most of the work needs to be done in Davenport and some of it needs to be done in Bettendorf – but Riverdale and Panorama Park have a little work as well. In our case, most of the sewer repairs we need to make can be done by re-lining the pipes. There are just a couple of spots where we’ll need to do something more involved.”
Rate Increases Are Inevitable, But Won’t Be As High As Originally Expected
With most of the financial modeling completed – thanks in large part to projections provided by the City of Davenport for anticipated waste treatment costs over the next 5 years or so – it’s possible to get a more accurate read on what is expected to happen with sewer rates when they are finally adjusted for FY 2021.
According to the mayor, all sewer rates are going to go up in July, but not quite as much as originally expected.
Even after we increase the rates in Riverdale, we should still be below where Bettendorf and Davenport are, cost-wise, with our rates in all categories (Industrial, Commercial, Residential, etc.). But more importantly, we should be able to control the rate growth and keep it at or below the CPI (Consumer Price Index) and still generate enough cash flow to self-finance the larger, capital projects.
New sanitary sewer fees should be ready for City Council review at its first meeting in July (07/14) and, if approved, will be used in the sewer billing that is mailed to residents near the end of the month.