King County sewer bills likely to rise

King County's most expensive public-works project ever, the $1.75 billion Brightwater sewage-treatment plant, is about to drive the region's already-pricey sewer rates much higher.

The cities and sewer districts whose customers are paying the tab are getting cranky about the cost — which doubled even before construction began — and the likelihood that the bill will rise beyond current official forecasts.

Seattle and most of King County's 35 other wholesale customers — mostly cities and sewer districts — have balked at extending their contracts for sewage treatment without a guarantee that the county will stick to its policy of having owners of new homes and businesses pay 95 percent of the cost of Brightwater — which is being built to accommodate growth.

Seattle, which serves 42 percent of King County's sewer customers and doesn't want to pay for the growth in outlying areas, is playing a central role in the dispute.

One result of the five-year-old contract impasse is higher bills. Because the current contracts expire in 30 years, King County can't sell 35-year bonds, which would spread debt payments over a longer period.

The longer the dispute goes on, the shorter the bonds and the higher the sewer rate. The county wants to extend the wholesale contracts to 2056.

Just this year, selling 30-year bonds instead of 35-year bonds pushed up next year's sewer rate by an extra 28 cents a month, according to the county.

Construction began earlier this year on Brightwater, King County's third regional sewage plant. Located in fast-growing Snohomish County near Woodinville, the plant will treat waste from new and existing customers in both counties, but growth is driving the project. It is scheduled to open in 2010.

Sewer rates were high even before Brightwater.

The $307 King County charged to cities and sewer districts to treat sewage for each household in 2005 was well above the national average of $209 and the national median of $182, according to a survey by the National Association of Clean Water Agencies.

Home buyers foot bill

To finance Brightwater, that annual wholesale rate will rise from $307 to $461 by 2011.

The actual bills homeowners and renters receive run somewhat higher than that because the city or local sewer districts add in their own operating costs.

Buyers of newly built homes will pay most of Brightwater's cost, in the form of a higher "capacity charge" paid on top of the regular monthly bill for 15 years. Including all costs, the buyer of a new home in Seattle can expect to pay $1,259 for sewer service in 2011, up from $830 in 2006.

(New-home buyers have the option of paying 15 years of capacity charges in a lump sum, which would total $5,196 next year.)

A proposed 50-year wholesale contract sent by the county to its wholesale customers several weeks ago reaffirms the principle that new construction should pay 95 percent of the cost of Brightwater.

But a specific formula for calculating the cost split was not included, said the county's chief sewer-contract negotiator, Bob Hirsch, because officials think 50 years is too long to commit to any rate-setting method.

The lack of specifics has reinforced fears that the county might shift costs from buyers of newly built homes to current ratepayers in the event that cost overruns at Brightwater come at the same time as a slowdown in the housing market.

Seattle City Councilman Richard Conlin says omitting such a formula leaves too much unsettled about potential costs for his city.

"If they [the county] really believe that growth pays for growth — and that's certainly the statement they make — then put your money where your mouth is."

It isn't yet clear whether suburban mayors and city councils will side with Seattle or the county. The 37-member Suburban Cities Association agrees with the county's stance that "a specific mathematical equation" not be included in a 50-year contract. So far, Renton is the only suburban city to have signed a contract on the county's terms.

Project's cost soars

Even though cost increases are common in complex public-works projects, some of the county's wholesale sewer customers are troubled by the doubling of Brightwater's estimated cost since 1998. Inflation in the construction industry accounts for much of the increase.

County Executive Ron Sims' selection of a site 14 miles from the Puget Sound outfall made it easier to design the plant but added a costly tunneling project. Sims' promise to make Brightwater odor-free and his commitment to spend $141 million in environmental mitigation pushed the price even higher.

Since making those decisions, said Brightwater project manager Christie True, the county has done a good job of keeping the cost "relatively stable the last couple of years."

To cities and sewer districts concerned about the cost, she said, "We're just as concerned as they are, and are going to work very hard to mitigate any further cost increases on the project."

But Ron Speer, the Soos Creek Water and Sewer District general manager and chairman of the wholesale customers' contract committee, is worried. "When you're boring big lines 300 to 450 feet deep, man, that's costly," he says. "I just hope that one of those boring machines doesn't break down or get stuck. Then we'll have a real problem."

Speer wants the new sewage contracts to require a performance audit of the county sewer system, more say by wholesalers in sewer operations, and a ban on selling treated wastewater if it would require subsidies from ratepayers.

Virtual veto power

King County's financial advisers say 35-year bonds can't be sold unless sewer districts representing 75 percent of ratepayers extend their contracts. That leaves Seattle, which represents the biggest block of customers, with virtual veto power.

Sims, frustrated over the contract impasse, last spring suggested a regional summit. If the cities and districts wouldn't sign contracts, he said in a letter to the County Council, he planned to "motivate" them by changing the cost-sharing policy, eliminating sewer-funded grants to cities, and charging Seattle ratepayers the cost of reducing combined stormwater-sewage overflows in the city.

Sims later backed down.

"Nothing's going to get resolved if people are saber-rattling," says Seattle Deputy Mayor Tim Ceis, adding that the city is committed to working through the issue with the county.

But as long as Seattle can block King County from selling bonds on more favorable terms, the city carries a big stick.

Keith Ervin: 206-464-2105 or kervin@seattletimes.com