Inside City Hall: The impact of raising sewer rates

The Brandon City Council recently passed a resolution setting wastewater service fees for 2019-2022. The rates reflect a 15 percent increase for the next four years beginning with rates to be charged for the January 2019 billing cycle. The rates were set after the council prioritized projects intended to be completed over the next six years, beginning in 2019. The projects fall into five broad project areas including the Westside Trunk Sewer, Sylvan/Rushmore Area, Core Area, new Forcemain Extension to Sioux Falls, and a new Eastside Collector.  

 

Westside Trunk Sewer

This is part of the project to reconstruct Holly Boulevard from Sioux Boulevard to the Big Sioux River as well as Dogwood, east of the railroad tracks, and Main from Dogwood to Aspen Boulevard. The sanitary sewer portion of this project is estimated to be $1,360,000. The project is on schedule to begin in the spring of 2019.

This project will replace the main sanitary line to the Big Sioux Lift Station that pumps our wastewater to Sioux Falls for treatment. The existing main is nearing capacity and is too shallow in places. This project will increase the capacity of the main as well as place the main deeper to improve the flow.  This project must be completed first before the City can begin replacing wastewater infrastructure in the core area.

 

Sylvan/Rushmore Area

The last phase of the reconstruction of the Sylvan Circle Area is scheduled to take place in 2019. After that is completed the City will transition into replacing water, sewer, streets and storm sewers in the area south of Sylvan Circle and east of Splitrock Boulevard. It is anticipated the Rushmore area will be completed in two phases beginning in 2021 and the next project taking place in 2023. The total cost to replace the sanitary sewer in this area is estimated to be $2,300,000.

 

Core Area

The Core Area is located between the railroad tracks, Splitrock Boulevard, Aspen Boulevard and Holly Boulevard. This is the original area of Brandon with the oldest sewer and water infrastructure in the community. The current plan is to reconstruct all of the infrastructure including water, sewer, streets and add storm sewer over the course of three projects spread out over five years beginning in 2020. The total estimated cost to complete the sewer improvements portion of the projects in this area is $5,500,000.  

 

Forcemain to Sioux Falls

Brandon currently pumps all of its wastewater to Sioux Falls for treatment. The wastewater is pumped from the new Big Sioux Lift Station located at the site of the old wastewater ponds by the fire hall through a forcemain that was installed in the early 1990s. Projected growth indicates that the forcemain will reach capacity within the next five years. Prior to reaching capacity, the City will need to install a second forcemain to accommodate the flow. The estimated cost for this project is $4,100,000.  

 

Eastside Collector

The City Council is also considering the construction of a new sanitary sewer main that would serve the area north and west of Bethany Meadows. This discussion is in the preliminary stages but it is anticipated that the construction could take place in the next year or two. The estimated cost for this improvement is $925,000.

The total cost for sanitary sewer improvements for all of the projects is $14,185,000. These costs will be funded by borrowing money to pay for the construction. The City will utilize both private loans as well as loans from the State of South Dakota. Projected loan terms and rates were utilized to project annual debt service costs if all of the proposed projects are completed. It is anticipated that the cost to service these loans will be $1,200,000 per year upon completion of all of the projects. That debt will be retired over a period of 15 to 20 years.  

The following table compares the current 2018 budget with the projected budget for 2025, after all of the projects are completed and the full amount of debt service becomes payable.

 

 

The Wastewater Service Rates set by the City Council are shown in the following table. Base charge is listed in the first column, volume charge is the second column, and surcharge is the third column.

 

2018	5.44	8.65	4.95
2019	7.00	9.95	4.95
2020	8.79	11.44	4.95
2021	10.85	13.16	4.95
2022	13.22	15.13	4.95

 

 

 

The State of South Dakota looks at the cost for a user of 5,000 gallons per month when they evaluate utility systems. The cost difference for a user of this size per year is shown in the following table.

 

2018	53.64
2019	61.70
2020	70.94
2021	81.60
2022	93.82

 

To determine your estimated monthly bill please use the following formula:

Base Rate + (Usage from Actual Bill/1,000 * Volume Charge) + Surcharge = Estimated Monthly Bill

 

These projects are critical to improve the infrastructure in our existing neighborhoods as well as for the future growth of the community. The rates that have been adopted are based upon estimated costs and constructions schedules and may change in the future.