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Your Sanitation Bill is Going Up Again, and Likely Again & Again

Your bill from Sanitation District 1 will be going up again, and according to the outlook presented on Monday morning, will go up continually for all of the near future.

Boone County Judge-Executive Gary Moore, Kenton County Judge-Executive Steve Arlinghaus, and Campbell County Judge-Executive Steve Pendery all gave their blessing to a 5% increase on your sewer and storm water bills, following the recommendation adopted by SD1's board last week.

The average monthly bill will increase $1.98 for sanitation and $0.24 for storm water, according to figures presented Monday.

In approving the rate increase, the judges-executive also approved the utility's budget, more than half of which is going to pay debt service on what will amount to approximately $815 million when the term on those loans end. SD1 has borrowed a total of $560 million for construction over the years. The rest would be accumulated interest.

SD1 executive director Dave Rager said that debt services consumes 55% of the budget now. He warned that Jefferson County, Alabama filed bankruptcy when its budget hit 60% going to debt.

Rager also said that SD1 would likely seek another 5% increase next year.

This year's budget does not have much in the form of bells and whistles. SD1 cannot afford to allow for expansion of its system in the form of new development in the suburbs, much to the chagrin of the Northern Kentucky Home Builders Association. SD1 expects $82.9 million in sewer expenses and $12.75 million in storm water expenses. It should bring in $84.2 million for sewer revenue and $12.7 million for storm water.

Rager said the budget's key focus areas are to protect its credit rating, continue to delay new work related to its consent decree with the federal government, reduce operating costs, and look for ways to extend the life of its existing system. SD1 will use cash financing for all capital improvement work in the future, will not fund expansion of the system currently, will create no new positions, and will increase employee health care contributions.

The utility's financial state saw projected revenue up $843,000 over 2014 with its debt serving growing next year by $867,000. Projected 2014 expenses are $3.2 million under budget. "They've done a very good job of controlling our expenses and some of that has to do with the weather," Rager said of his staff.

SD1 is also looking for ways to help cities and their residents with sewer lateral pipe issues. Where previously the utility would repair any breaks, the responsibility now falls on the homeowner. The pipes are technically private property, but any work often includes rebuilding the street above. "The Sanitation District should take responsibility for what's under the streets," Arlinghaus said. "No homeowner has the ability to take care of such an expense. It would be a burden on nine out of ten families financially."

Covington City Manager Larry Klein also called for SD1 to pick up some of that burden again, a point he and other city leaders have made and one Klein reiterated Monday. The cost could sometimes be as high as $15,000. Covington allocated some of its federal community development block grant money for the cause but other sanitation issues continue in Northern Kentucky's largest city, particularly sewage in people's basements following weather events. That's why city leaders called on SD1 to dedicate the proceeds from any rate increase to addressing the problems in the region's urban areas.
"Raw sewage into homes, that imperils public health and public safety," Klein said. "A lot of our residents have replaces their furnace and water heater two or three times in the past few years. We do believe rate hikes should be used for the existing system. We know this is not sustainable. There has to be growth but we don't believe growth should be accommodated at the expense of public health."
Mayor Sherry Carran agreed.
"I don't believe we should be calling it a backup," Carran said Monday. "It's a flooding of the sewer system. It's way more than a backup." She described a scene from last summer's flooding where four to five feet of water in the streets means that a lot was headed to people's basements. "This is flooding the system because there isn't the capacity. It happens more in the urban core. We're not saying no new development. We want their to be a balanced approach, but please don't extend your lines farther out when your existing customers are in such great need."
The judges-executive also adopted a resolution calling on SD1 to undertake a study to evaluate its rate-setting policies and practices to consider the need for future rate funds that would be encumbered and committed to address system capacity needs that will service the economic development, and to meet with developers to explore their willingness to contribute toward the financing of an increased system capacity.
Moore, Arlinghaus, and Pendery's resolution call for the study to be completed by the end of 2014.
Written by Michael Monks, editor & publisher of The River City News
Photo: Covington City Manager Larry Klein speaks to the judges-executive and SD1 Board on Monday/RCN