Industrial park growth fuels proposed sewer rate hikes

In 2029, Richmond Sanitary District’s residential customers could pay sewer rates nearly 23% higher than today’s, costing a 4,000-gallon-a-month user about $150 extra for the year.

Pat Smoker, the sanitary district’s supervisor, presented Richmond Common Council during its Aug. 4 meeting with an ordinance that would raise sewer rates and the storm water rate. Council referred the ordinance to its finance committee and will conduct a public hearing about the rates during the 7 p.m. Aug. 18 meeting in the third-floor chambers of the Richmond Municipal Building, 50 N. Fifth St., Richmond.

A 326-acre expansion of the Midwest Industrial Park requires expanded sewer capacity. The acreage on both sides of Round Barn Road south of Gaar Jackson Road was purchased in 2022 for $13,750 per acre from Toschlog Family Farms. The three-phase infrastructure project is expected to cost $38 million and increase capacity from 290,000 gallons to more than 2 million gallons per day.

Smoker said the sewer district would like to begin the first two phases this fall, and multiple funding options were explored.

“At the end of the discussions, the only viable source of funding to meet the time constraints was determined to be sewer rates,” Smoker said.

Corby Thompson of O.W. Krohn & Associates told council members that the MIP project and other sanitary district capital projects over the next five years were considered when analyzing how much rates would need to increase. Sewer expenses and pro forma revenues from 2026 through 2029 were compared to find each year’s shortfall that rate increases must offset. The sewer rate is proposed to increase 6% each of the first three years and 3% in 2029 to avoid “rate shock” from a larger increase.

Should new companies occupy the industrial park and use the increased capacity, captured tax increment finance money could pay some of the infrastructure project’s bond debt, relaxing reliance on sewer rates.

“The point would be to have the users pay for this infrastructure development, and I think that’s where we need to be on this,” said council member Jerry Purcell.

The sanitary district last studied its rates in 2022, and council approved increases for 2023, 2024 and 2025. Those hikes increased a 2,000-gallon monthly user’s bill from $32.94 to $41.89. That bill would cost $44.40 in 2026, $47.06 in 2027, $49.88 in 2028 and $51.38 in 2029, a total 56% increase from 2022 to 2029. The 2,000-gallon customer would pay $113.88 more in 2029 than this year.

For a 4,000-gallon monthly customer, the bill has increased from $43.44 in 2022 to $55.23 this year, and the new proposal would raise it to $58.54 in 2026, $62.04 in 2027, $65.76 in 2028 and $67.74 in 2029. That customer would pay $150.12 more in 2029 than this year.

The sanitary district has not raised the $6 residential stormwater rate since 2009. The rate proposal would increase it to $6.90 in 2026, $7.95 in 2027, $9.15 in 2028 and $9.40 in 2029.

City code amendment

Council held on second reading an ordinance that would amend city code concerning online posting of meeting agendas, minutes and memberships for the city’s boards and commissions.

No one spoke during the public hearing, but council has questions about the training of impacted employees, plus the responsibility and accountability of ensuring the items are properly and publicly posted. Questions also arose about updating the city’s website with accurate information.