Friday, April 22, 2011

Sacramento Press: City Needs to Make Costly Water Treatment Upgrades

Costly water treatment plant upgrades ahead

by Kathleen Haley, published on April 21, 2011 at 9:47 PM

The Sacramento Press

When the City Council approved $7.4 million for design work to upgrade the city’s two water treatment plants on Thursday night, it inched forward on a long-term and costly project to overhaul the plants.

Image by: Brandon Darnell, Sacramento Press

Remodeling the city’s aging water treatment plants will take years of work, may cost about $150 million and could involve significant utilities fee hikes for property owners and businesses in Sacramento, according to an April 21 report by city staff.

But the City Council and city staff agree that the treatment plants are so old that the remodel of the plants will be necessary. One of the city’s plants, located on the Sacramento River, was built in the 1920s. The other plant was built in the 1960s and is located on the American River.

“I think we’re living on borrowed time,” Councilwoman Sandy Sheedy said at Thursday night’s City Council meeting.

The council unanimously approved the $7.4 million, which comes from the city’s water fund and is not part of the general fund, according to Utilities Department Director Marty Hanneman.

City staffers said in their report to the City Council that the plants cannot remain as they are.

“Much of the existing infrastructure at the city’s water treatment plants has exceeded its service life and is at risk of failing,” the report said.

The City Council did not make any decisions Thursday on how to fund the $150 million in upgrades for the plant.

Right now, city staff is examining the idea of selling revenue bonds to pay for the projects. In that scenario, city ratepayers – property owners and businesses – would be charged an estimated 11 percent rate hike to help cover the city’s debt accrued from selling bonds, according to the city staff report.

If the council wants to set rate hikes, it could phase them out over a series of years, Hanneman said.

Hanneman said the 11 percent figure was an estimate that could change. The Utilities Department will present a funding strategy to the City Council in August, Hanneman said.

At that time, the City Council may discuss numbers that are significantly higher than $150 million, according to city staff. The department noted that it had additional upcoming infrastructure costs, such as the city’s need to replace pipes that are 100 years old, Jamille Moens, the department’s business services manager said.

Kathleen Haley is a staff reporter for The Sacramento Press. 

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