Oregon this year will begin improvements to its Wastewater Treatment Plant, a $16 million expansion project that will be constructed in two phases over five years.
The sewer rate will go up to help pay for part of the project.
“Construction of Phase 1 will begin soon,” City Administrator Mike Beazley said last week. “Right now, we’re in the engineering phase. It’s something the community has been discussing for almost four years now as we’ve gone through our permit renewal process with the Ohio Environmental Protection Agency.”
The plant is being expanded in accordance with its Ohio EPA National Pollutant Discharge Elimination System (NPDES) permit, which requires the city to increase the secondary treatment capacity of the wastewater treatment plant from 24 million gallons per day to 35 million gallons per day to eliminate secondary treatment bypasses and sanitary sewer collection system overflows during wet weather events.
“Communities like Oregon, all across the country, are going through this. It’s something the EPA is requiring. Toledo has already gone down that path with larger orders. This happens to be Oregon’s turn,” said Beazley. “So far, looking at the engineering phase, the project is coming in well. In some categories, I think we’re going to come in lower than our estimated prices and costs. We don’t have any reason to believe that the $16 million estimate is too low thus far.”
Phase 1 is being funded by a $700,000 Ohio Public Works Commission (OPWC) grant, a $700,000 Ohio EPA Water Pollution Control 0 percent Loan Fund and City Capital Improvement Fund. Phase 1 is expected to be completed in December.
Phase 2, which will start by December 2015 and be completed in 2017, will be funded by an $800,000 OPWC grant, an $800,000 OPWC 0 percent loan, and a local share financed with an Ohio EPA Water Pollution Control Loan Fund.
Loans for Phase 1 and 2 will be paid through the establishment of a new capital improvement rate, which will be charged to all sewer customers over a 20 year period. The capital improvement rate for Phase 1 will be established this month. The capital improvement rate for Phase 2 will be established in March 2016.
“Like other communities, the way the project will be funded is with a capital charge on everyone’s sewer bill,” said Beazley. “The costs will be shared by Oregon utility customers as well as the customers that Oregon serves in Wood County and in Jerusalem Township.”
Approximately 30 percent of the costs will come from customers in neighboring communities, he said.
“Obviously, customers do not enjoy a rate increase. But it is worth noting that Oregon currently has, if not the lowest, among the lowest water and sewer rates in Ohio,” he said. He expects the rate to still be among the lowest after the improvements are completed.
Beazley said the city will have a better idea of how much the rate will rise after negotiations are completed with the Northwestern Water & Sewer District.
“We don’t have a number to put on the table yet. We’ll keep our rates lower than most of our neighbors in northwest Ohio,” he said.
The city plans on discussing proposed rate increases at committee meetings this month.
The city can’t tap into the $6 million in the general budget stabilization fund, also called the “rainy day fund,” or its significant carryover cash reserves of $10 million, to help pay for the project, said Beazley, because “income tax revenue is not typically used for utility infrastructure investments.”
“In some ways, it’s not the same group of payers,” said Beazley. “Many Oregon residents don’t have city sewer, but they’re part of the income tax paying community. There are many consumers of the water and sewer system who are not Oregon residents at all. They are in the Northwestern Water and Sewer District or in Jerusalem Township. So, there’s a general sense that it’s best practice to use utility revenue to achieve the purpose of the utility, rather than expect the Oregon residents, whether they are sewer customers or not, to pay for that improvement.”