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Toledo, Ohio & Lake Erie

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Oregon council this year plans to discuss an increase in the sewer rate that will help pay for an expansion of the wastewater treatment plant, which will be done in two phases over five years at a cost of over $15 million.

“We’ll be looking at a rate increase. Certainly, that involves all of you,” Public Service Director Paul Roman said to council at a meeting on Monday.

The increase will be presented to customers as a capital improvement rate charge, he said.

“I think the way to do this is to set up two capital improvement rate increases, one for each phase,” he said.

The current rate pays for operations.

“It would be my wish to look at the first rate increase sometime in January, of 2014. You have the second half of this year to try and establish that rate for Phase 1,” he said.

“Our code allows us to add a capital improvement rate for any particular capital improvement project,” he said after the meeting. “We have not yet figured out what that rate will be. We’re still going through our design. Eventually, likely some time in the summer, we’ll start meeting and going through in more detail what that rate increase would be. We’ll eventually figure out our total cost and the cost to finance it, then spread it out – and that’s how we’re going to set up the billing system. It will be applied towards the inside user as well as the outside user.”

Lucas County and the Northwestern Sewer and Water District represent outside users or customers, he said.

The rate will be based on per thousand cubic feet of wastewater treated, he said.

The debt charge has been higher for outside customers.

“The debt charge is really a capital improvement charge that paid for the initial construction of the wastewater treatment plant in 1978,” he said. “We used income tax to pay the inside users share of it. We refinanced the debt a few times. Only the outside users will still pay that debt charge through 2017.”

Payment of the debt will be spread out over 20 years for each phase of the project, he said.

“They’ll both have a 20 year pay off period,” he said. “It’s really well laid out. I think it’s a question of whether there should be income tax used or not. Energy savings can go toward the financing of this project over a 20 year period.”

For Phase I, the city received a $700,000 loan and a $700,000 grant from the Ohio Public Works Commission (OPWC). The local share is $7,612,000 and it will be financed mostly by the Ohio EPA’s Water Pollution Control Loan Fund. The city, the Northwest Sewer and Water District, and Lucas County will contribute toward the local share of the project. Roman said he will apply for more funding for Phase 2.

“Overall, everything is on schedule and going well,” he said.

Administrator Mike Beazley said there had been some concerns about the scope of the rate increase.

“We feel good it’s much less costly than originally anticipated. I’m very satisfied Oregon will still comfortably have the lowest water and sewer rates in the market when we’re finished,” said Beazley.

The expansion project is in response to a mandate from the Ohio EPA to deal with storm water and prevent sanitary sewer overflows.

“The overall issue we have is that the sanitary sewer system takes on a lot of storm water. We’re in the process of trying to remove as much storm water as possible, because we don’t want to treat it. That storm water also backs the sewers up and eventually goes into basements and is a major problem. Whatever storm water we can’t get out, we have to treat, so we have to expand the plant in order to do that. The Northwestern Sewer and Water District also has a lot of storm water in their system and they are being mandated by the EPA to provide storage for their own sewage before it enters Oregon. So they’re part of the expansion in a way, and they are covering that cost themselves. We’re trying to do what we can to remove inflow and infiltration, but in the end, we still have to treat more flow because of more storm water.”

Phase I will cost about $9 million, while Phase 2 will cost $6 million.

“Phase I includes a lot of equipment replacement. Some of that equipment includes blowers for air. By replacing the blowers, energy consumption will go down because the new blowers are much more energy efficient. So there will be some savings with the equipment replacement because we’re putting in more energy efficient equipment,” he said.

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