By Debby Woodin

dwoodin@joplinglobe.com

A public hearing has been scheduled for June 1 on a proposed increase of Joplin sewer rates, but the chairman of one of the city’s largest commercial users won’t wait until then to object to the amount and to the city’s approach in making the decision.

John Berrey, business chairman of the Quapaw Tribe, which operates Downstream Casino, said he will attend the council’s next regular meeting on May 18 to express his views.

Berrey told the Globe on Wednesday that the proposed increase in sewer rates plus a 50 percent surcharge the council voted May 4 to impose on customers located outside city limits could cost the casino $20,000 to $50,000 a year more, though city figures estimate the increase at less than $10,000.

The proposed rate increases are part of those planned in connection with $35 million in sewage plant upgrades city officials say are being mandated by federal and state regulations.

Objections

Asked what he intends to the tell the council, Berrey said, “First of all, I want to talk about fairness and about their process, and how there’s little or no input by the user” in decisions on the rates. “It’s pretty dramatic what they’re doing.”

He also objects on behalf of employees who live in the city.

“As one of the area’s largest employers, I think it’s sort of unfair to our employees, many who live in the city limits,” he said. “And also when we built our infrastructure, we put in some extra water lines and we donated that to the city to save them future expansion work costs. And we’ve never received a ‘thank you’ or, I guess, this is our ‘thank you’ for using our capital to help them. We don’t have a problem paying our share, but we don’t think their process or their amount of increase is fair.”

City Manager Mark Rohr said he has personally talked with a consultant for Downstream on ideas for lowering costs. He had the city’s consultant on the rate study re-examine the study twice, adjusting the terms of the city’s debt and other factors, to reduce rates. He said the proposed rates are 10.5 percent lower as a result.

“We will continue to work with Downstream Casino and any other person or entity that can provide us with any ideas on how to lower rates,” Rohr said.

Tim Nyander, the manager of city services including wastewater, said Downstream’s bill would rise from $1,950 a month to about $2,765 based on current usage, including the surcharge. That would cost $9,780 more a year.

Rate proposal

A five-year plan for sewer rates expired last year and a new rate study was done by a consultant to recommend the level of rates needed to pay for operations and debt for the next five years. The city staff says it has no choice but to do approximately $35 million worth of construction at the city’s two wastewater plants, largely to meet the new state and federal mandates that go into effect in 2012. That work will be paid for with the increased rates.

Residential rates would go up by a total of $6.32 per month over five years if the council approves the proposed rate increases. The current average rate is $21.01 for 6,000 gallons of water used. The first raise next year would take that rate to $22.48.

Rates to commercial and industrial users, particularly those located outside the city limits, could be substantially raised.

Officials are not projecting rate increases that will be necessary beyond the first five years of the debt. The proposal calls for the city to pay off the debt in 20 years.

According to the city’s figures, a large-volume user who discharges 1.5 million gallons of wastewater a month would see their monthly bill go from about $1,600 to about $1,800. If that customer is not in the city limits, the bill would be 50 percent higher.

Nyander, the city’s manager of services including the wastewater plants, said Downstream is one of the city’s largest users, discharging an average of 1.5 million gallons a month. He said at that volume, Downstream ranks ninth out of the 27 largest industrial users.

Council action

While the City Council has taken no formal action on the proposed raises in regular rates, the council did approve the 50 percent surcharge at its May 4 meeting against the recommendation of city staff.

Finance Director Leslie Jones recommended a raise of 30 percent. The current surcharge is 10 percent for residential customers and 9 percent for commercial and industrial users outside the city limits.

Jones told the council that she believed the 30 percent raise could be justified by the costs incurred to provide service but she felt that any higher increase would meet with opposition of customers.

Benjamin Rosenberg introduced a motion to raise the surcharge rate to 30 percent, which failed because of the lack of a second.

Bill Scearce then made a motion to increase the rate to 50 percent. Morris Glaze seconded the motion. The council voted 6-3 to approve the higher rate. Those who voted in favor were Scearce, Glaze, Michael Seibert, Melodee Colbert-Kean, Phil Stinnett and Mike Woolston. Mayor Gary Shaw along with Rosenberg and Jim West voted against the higher increase.

The council has a policy that the mayor speaks for council decisions after a vote is taken.

The mayor said Wednesday that he wasn’t sure of the reasons behind the individual votes, but he defended the proposed rate increases.

“We’ve taken two or three looks at the rates, and tried to whittle them down as much as possible, even to the point of having an election to borrow the money from the state at a lower cost. None of us like increases. This is one of those things we’re mandated to do.”

Scearce said he proposed the higher rate because “the citizens of Joplin assume the responsibility of maintenance of the wastewater facility along with the liability that goes along with it.”

Those outside the city limits “have the advantage of improving (their) property by being tied onto the city sewer. That’s a value-added benefit that property owners get. I felt the 50 percent was fair. The benefit without the liability of operation of the sewer system in my opinion is worth that.”

He said he would look forward to hearing Berrey’s concerns as he would anyone who wishes to address the council.

Colbert-Kean and Seibert said they would not comment beyond what the mayor said on behalf of the council.

Efforts to reach Glaze, Stinnett and Woolston were unsuccessful.

Hearing

Residential and commercial or industrial users may comment on the rates during a public hearing that is to be held at the City Council’s regular meeting at 6 p.m. Monday, June 1, at City Hall, 602 S. Main St.

Public hearings May 4 on the engineering plan for the proposed $35 million construction project drew no public comments.

There also was no public comment at that same hearing on an ordinance that would set an election for Aug. 4 on a bond issue for the work.

Voters will decide only whether the city can borrow the money from a state loan fund; they will not vote on the question of whether to do the project.





Savings

City staff said the state loan fund would save $9 million in financing costs compared with a loan from a bank, which would carry a higher interest rate.