Wastewater News Memo

Media Contact:

Wayne Scarbrough

(423) 745-4501 ext. 6002

wscarbrough@aub.org

June 28, 2017

Last night at its monthly board meeting, directors of Athens Utilities Board (AUB) approved on first reading a resolution to raise wastewater rates in steps over the next 18 months to address debt obligations tied to the construction of the Oostanaula Wastewater Treatment Plant.

There will be a second reading of the resolution for the rate increase at the AUB July board meeting.

If approved on second reading AUB wastewater rates will begin a paced, incremental increase beginning August 1 with a step up every six months for the next year and a half.  As of February 2019, the rate will have increased in total by $1.00 per thousand gallons used.

This move is part of a planned, long-deliberated action based on debt service obligations related to construction of the community's Oostanaula Wastewater Treatment Plant.

The last wastewater rate increase at AUB was in 2009.

Back in 2002, the AUB board of directors and management staff agreed on the need for a massive redesign and construction of the Oostanaula plant.

At the time, it was a 1960s era plant designed to handle 2.8 million gallons of wastewater per day (MGD). While the operators did their best, the plant often bypassed millions of gallons of untreated water to the creek when heavy rains fell. The creek itself was considered a non-contact stream in the eyes of environmental regulators, based in part on the plant's discharges.

That plant construction project was a success by all measures.

Today's Oostanaula plant is capable of peaking at 15 MGD. The water that is discharged from the plant is notably cleaner than the creek itself.

Oostanaula Creek was removed from the non-contact state designation in August 2015 because of vastly improved water quality in the creek based in large part on the current treatment plant's operations.

Redesigning and building the new, notably larger Oostanaula plant in 2004 cost about $20 million. Because of debt the division held at that time and to keep customer rates in check as long as possible, the construction debt repayment was designed with the first 15 years of payments significantly lower than subsequent years. As of 2019, the wastewater division's annual debt expense will nearly double, from about $800,000 to around $1.3 million.

This is why the AUB board and management team are moving now to begin this series of rate moves designed such that by 2019, when the much larger debt payments begin, the utility has ample monthly cash flow to cover it.

Today, the average residential AUB wastewater bill is $35.70 based on use of 3,400 gallons.

With the new rate schedule, it will cost about $0.85 more per month starting August 2017 and after the final step adjustment in February 2019 will be about $3.40 more per month than it is today.

In addition to the increased debt service, the cost to operate the community's vast wastewater collection and treatment system has risen since the 2009 rate move. As with every business in the past eight years, the cost for everything we do to maintain and operate has increased notably. Examples of rising cost centers include:

• Utility costs to run the plants and support systems throughout the territory
• All hardware, such as pipe, valves, pumps, etc.
• Vehicle operation and maintenance
• Cost of labor and contract work
• Treatment chemicals
• Business insurance

Nobody likes a rate increase no matter how small. We understand that because we all pay utilities bills, too.

We also know that people want their wastewater taken away from the house every time they flush a toilet, use a garbage disposal, wash clothes, or take a shower. Moreover, they want the treatment process to take care of the local waterways and not be a source of pollution.

Providing top-notch wastewater services and environmental stewardship is a major mission of AUB's for the community. When you consider the value of a sound, well maintained, environmentally responsible wastewater complex, the monthly customer impacts really are minimal.

That is, if the new wastewater rate is fully implemented over two years, in February 2019 the impact of the rate increase on the average AUB customer using 3,400 gallons will be about 11.3 cents per day ($3.40 more per month).

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