Audit: Seattle's rates for water, sewers among nation's highest

Seattle water customers pay higher wastewater-treatment rates compared with other large cities, but the city has limited control over the rates because of its 45-year, nonnegotiable contract with King County to provide sewage treatment.

That's one of the findings of a city-government audit of Seattle Public Utilities (SPU) released Monday. The findings will be presented to the City Council Public Utilities and Neighborhoods Committee on Tuesday.

The audit cites a 2010 industry analysis by Black & Veatch that found Seattle paying the highest water and wastewater-treatment bills among 50 U.S. cities, followed by Atlanta, Honolulu and San Diego. Memphis had the lowest rates.

A 2009 analysis by SPU found that Seattle's bills were among the nation's highest.

The report Monday by Seattle Auditor David Jones noted that up to three-fourths of the $187 million SPU collected from ratepayers in 2009 went to King County to pay for wastewater treatment.

King County's monthly capacity charge — the amount assessed new customers to help pay for improvements to regional wastewater treatment — has risen from $7 in 1997 to $49 in 2010. The increase is largely because of higher-than-expected costs associated with building the new Brightwater treatment plant and less-than-expected development in the county that would have spread the costs among more customers, Jones said.

The audit found that Seattle customers pay about $34 more per year than they would if King County calculated what it charges the city according to policies and agreements that call for new users to pay higher rates than existing customers to finance the new sewage-treatment capacity.

But the county doesn't follow that formula. If it did, rates for new users would be "really, really high," Jones said.

The audit concludes that the total cost to Seattle ratepayers may be $150 million from 2003-2030.

The contract between the city and county "allows the County complete discretion over how their sewer rates are calculated and does not provide Seattle or the County's other wholesale sewer customers with any significant role in setting rates," the audit says.

The contract also does not grant Seattle or an independent watchdog authority to audit county records.

"From a good-government standpoint," Jones said, a contract would provide more protections for Seattle's ratepayers.

A spokeswoman for King County said the rates it charges to its 35 municipalities are equitable.

"We have a financial-policies working group discussing charges. Most feel it's fair," said Pam Elardo, director of King County wastewater treatment.

The audit also found other problems with the city's wastewater operations.

It concluded Seattle may be losing money because it doesn't adequately monitor wastewater use at major construction sites and doesn't have a good system to collect delinquent-renter accounts totaling more than $1 million.

Lynn Thompson: 206-464-8305 or lthompson@seattletimes.com