“It’s obvious, they built a sewer plant that cost an arm and a leg, and the question is too late now whether it was really needed or not because it’s done,” Rowland said.
Members of the City Council in April rejected the 9.5 percent increase, but after interim City Administrator and Finance Director Jessica Kinser told them what the consequences would be on the city’s long-term control plan, they reversed their decisions.
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.
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 also would risk a $150,000 fine for severing the already-approved contract with the project contractor.
Although other funding options such as a general obligation bond or using local option sales tax to fund the entire $7.5 million project were explored, the sewer increase was the only viable option, Kinser said.
The 9.5 percent increase will come before the council again for final consideration.