Sewer bills set to take off

Annual sewer bills of heavy industrial customers such as meatpacking plants could increase by nearly $1 million by 2014 because of Omaha's massive overhaul of its sewer system, and that makes business proponents nervous.

“If already people are thinking maybe there are different places that can do the production, that is a problem for us. We are trying to avoid that conversation even from happening,” said David Brown, CEO of the Greater Omaha Chamber of Commerce.

Brown said he met recently with representatives of about 12 companies to discuss ways beyond sewer fees to pay for the federally mandated project. More than 750 communities must make similar repairs, and other cities might have found different ways to fund the work, he said.

It's too early in the group's discussions to make any proposals, Brown said, and changes to the city's funding policy might require changes in state law.

Alternatives might include property tax increases or stormwater fees. The latter would be based on the amount of land someone owns that doesn't absorb rainfall and contributes to water runoff, Brown said.

“We're pretty certain property taxes are not the way to go,” Brown said, adding that Nebraska's property taxes already tend to be high.

Residential customers, percentage-wise, will be the hardest-hit by the city's $1.7 billion sewer project, but the total bills are much greater for industrial users such as meatpacking plants, laundries and hospitals.

Brown declined to name the companies with which he met, but the biggest sewer users facing the largest individual cost increases are Kellogg Co., Greater Omaha Packing Co. and Nebraska Beef. Smaller industrial customers affected include Roberts Dairy, and laundry companies AmeriPride Services and Max I. Walker.

Kellogg officials said they are working with the chamber to better understand the financial impact of the sewer project. They referred additional questions to Brown.

Randy Schmidt, general manager of AmeriPride, said that his company wasn't among those meeting with Brown but that he wondered how the sewer project would affect his business. Told that his sewer fees could go from about $48,000 this year to $84,000 in 2014, Schmidt said, “I had no idea it would be that high.”

Nevertheless, he said, the increase wouldn't prompt him to leave the city.

Calls to the meatpacking companies, Roberts Dairy and Max I. Walker were not immediately returned.

Business interests aside, there might be other reasons to look at different funding methods, Brown said.

Sewer fees currently are based partly on the amount of water used. If businesses increase conservation, sewer fees might fall short of what the city needs to pay for the project, Brown said.

“There is a flaw of putting all your eggs in the basket of user fees,” he said.

Marty Grate, the city's environmental services manager, said he has met with business groups to inform them of the changes. He said he has received a “handful of calls” from commercial customers concerned about rates.

“They are going to see some very costly increases in the coming years,” Grate said. “This is a hugely expensive program.” The Public Works Department is willing to consider other funding ideas, he said. The city wanted to apply stormwater fees in the past, but the necessary legislation failed to pass the Legislature, Grate said.

Sewer rates increased 9 percent in January and will increase by double-digit percentages through 2014.

Grate said Omaha has among the lowest wastewater fees in the nation, and the higher bills will bring it closer to the national average. That could remove one selling point for prospective businesses, but it shouldn't make Omaha noncompetitive or drive companies away, he said.

Generally, the sewer fee appears on the same statement that customers receive from the Metropolitan Utilities District for their drinking water and natural gas.

Grate said many customers, whether homeowners or businesses, think they are bearing the brunt of the project's costs. But the bills are based partly on a formula of how much water a user discharges, he said. Commercial and industrial users also pay extra monthly charges for things like inspections and water treatment.

The city gets about 60 percent of its water treatment revenue from homeowners, because they make up the bulk of customers. There are fewer commercial and industrial users, so although individually they pay more, they bring in lower percentages of the overall revenue, Grate said.

“Everybody contributes to pollution, everybody will benefit from the clean water, and everybody will pay a bigger bill.”

Contact the writer:

444-1117, joe.ruff@owh.com

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