The Clinton Herald, Clinton, Iowa

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April 24, 2013

Prior sewer rate decision reversed

Residents face a 9.5 percent hike after all

CLINTON — Clinton residents face a 9.5 percent sewer increase after all, Clinton City Council members decided following a discussion regarding the implications of keeping rates as they are.

Council members during their April 9 meeting rejected the rate increase 5-2, but following through with this decision could have major effects on the city, Interim City Administrator Jessica Kinser explained.

During the Clinton City Council’s Committee of the Whole meeting Tuesday night, Kinser told council members that without at least a 9.5 percent increase, the city would not be able to pursue a $6.55 million state revolving fund loan. The city would be unable to pursue the loan because without the rate increase, it could not prove that it had the sufficient rates to meet the requirements of the state revolving fund.

Without the loan, the city would not be able to complete the 25th Avenue North pump station project under the timeline mandated by the city’s long-term control plan. The entire project is estimated to be about $7.5 million with the remaining $1 million coming from local option sales tax.

By delaying the project, the city would face anywhere from $300,000 to $1 million in fines from the EPA and Attorney General’s office. The city would also risk a $150,000 fine for severing the already approved contract with the project contractor.

Kinser said she and Jenny Blankenship, of Public Financial Management, have discussed other ways to pay for the pump station, including a general obligation bond. However, pursuing this kind of bond would bring the city beyond its established debt capacity.

Using the local option sales tax to fund the project entirely was also explored, but that option would further delay other items in the plan. This option would hurt the city later, Kinser explained.

“As I sit here with you tonight, I’m telling you that really the only way that we can get this done that does not mess up other plans that we’ve had is to move forward with that 9.5 percent rate increase in order to utilize the state revolving fund as the funding source for the 25th Avenue North project,” she said.

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