Riverdale considers new sanitary sewer rates for FY 21

Riverdale considers new sanitary sewer rates for FY 21

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 Sanitary Waste Treatment Facility in West Davenport – jointly owned by Riverdale and three other cities.

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.”

(from left to right) Mayors Rice (Panorama Park), Bawden (Riverdale), Klipsch (Davenport) and Gallagher (Bettendorf) sign the documents setting the joint sewer 28E Agreement between all four cities in place.

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. 

Council to consider establishing a sewer commission for 2020

Council to consider establishing a sewer commission for 2020

In an October 17th memo to the City Council, mayor Mike Bawden, provided some initial thoughts on setting up a City Sewer Commission for 2020. The item is one of several slated for the COMMITTEE REPORTS section of next Tuesday’s City Council Meeting (to be held at 10/22/19).

Mike Bawden, Mayor of Riverdale

In the memo, Mayor Bawden, said the time was right to consider such a proposal, given the fact that the City of Riverdale is “fast approaching a point where we’ll have a good handle on the anticipated costs of infrastructure upgrades that will need to be made at the Waste Water Treatment Plant in West Davenport. That is the plant that services all of Riverdale’s sewage, which is conveyed to the plant through an extensive network of pipes running from Panorama Park through Riverdale and Bettendorf to Davenport.

The expected increase in costs to the City and the fact that rates have not been adjusted for quite some time mean sewer rates in Riverdale are likely to rise quickly and dramatically. The purpose of a City Sewer Commission, then, is to provide residents with an opportunity to participate in the conversations and decision-making process when it comes to building, maintaining and paying for the system.

Sewer Rates are Expected to Rise in 2020

With the memo specifically mentioning rates, Mayor Bawden provides the following information:

The City of Riverdale’s rates have not been adjusted in many years, resulting in on-going losses in the City’s Sewer Fund. Infrastructure repairs need to be paid from this fund, as well, and this past year, the Council had to move money from our General Fund to the Sewer Fund to cover that expense. While this is allowable (and we had the cash to do it), in the future, we may need to issue bonds to cover infrastructure repairs/enhancements deemed necessary by the Council.

Commission Structure and Responsibilities

According to Mayor Bawden, the Sewer Commission would be designed to operate in a manner very similar to the City’s Planning & Zoning Commission:

Much like the Planning & Zoning Commission, the Sewer Commission would meet once a quarter in a public meeting (with a posted agenda and minutes) to hear presentations, conduct their deliberations, and vote on their recommendations. Official “actions” (e.g. authorizing expenditures, setting rates, etc.) would be taken by the City Council using the research and recommendations of the commission as an important source of information.

 

Every meeting held by the Sewer Commission would include, at a minimum, a financial report on the fiscal health of the sewer fund, a collections report identifying who is delinquent in paying their sewer fees, a projection of sewer fund viability at current/proposed rates, and appropriate monitoring reports on flow and other quality metrics deemed necessary by the commission.

 

The commission would be managed by a Sewer Commission Administrator (most likely the City Administrator) to make sure notices are posted and information is made available according to the State of Iowa’s Sunshine Laws. The chair of the commission would be expected to attend meetings of the Joint Sewerage Commission – the 28E that’s being formed by Davenport, Bettendorf, Riverdale and Panorama Park to oversee the operation of the 1973 Trunk Line, the Waste Water Treatment Plant and the Compost Facility.

So, what do you think of this idea? Let us know in the comments section, below …

Sewer rates expected to rise in 2020.

Sewer rates expected to rise in 2020.

City officials have been telling Riverdale residents their sewer rates are unrealistically low for over two years. And now, after years of discussion and planning, costs for the shared sewer line running from Panorama Park to West Davenport have been determined by a joint body representing all of those communities.

That means the City of Riverdale can now re-set its sewer rates for residents to reflect the actual costs of belonging to this common utility.

While rates are expected to be re-set significantly higher than they have been in Riverdale, it’s expected that the rates will still be at or below rates for homeowners in Bettendorf or Davenport. Rates in Riverdale are currently as much as 80% lower than costs experienced by some Davenport homeowners.

So why has it taken Riverdale so long to re-set its rates?

There are two big factors that affect Riverdale residents’ sewer rates: determining how much of Riverdale’s “flow” is the result of commercial activity from Arconic and finalizing the cost of improvements to the jointly-owned waste water treatment plant required by the Iowa Department of Natural Resources (IDNR). That information now appears to be at-hand and negotiations with the IDNR to extend performance deadlines have also helped reduce costs to a degree.

The City’s plan, as it currently stands, is to start re-working calculations for sewer rates to reflect the current flow rates, planned improvements/upgrades to the City’s sewer lines (to reduce “inflow & infiltration” and, thereby decreasing flow to lower costs), and projected capital improvements at the waste water treatment plant in West Davenport. Ideally, that work will involve the new City Treasurer (assuming a satisfactory candidate can be found expeditiously).

Once preliminary calculations are done, the City will host an open meeting with the public to walk through the issues, process used to calculate the new sewer rates, projected effects of adding homes in the Woods Estates development and to solicit feedback.

There is no delay expected in first-quarter billing for 2020 at this time.