City Closes Out Sewer Project

$185 Million Undertaking Was Fayetteville’s Costliest

Timothy Tinsley, an operator for CH2M Hill, which operates Fayetteville’s West Side Wastewater Treatment Plant, walks Dec. 13 through the plant.
Timothy Tinsley, an operator for CH2M Hill, which operates Fayetteville’s West Side Wastewater Treatment Plant, walks Dec. 13 through the plant.

— Work on the city’s massive wastewater system improvement project is completed, but don’t expect sewer rates to go down.

Two final components of the $185 million undertaking — evaluating how much it would cost to comply with stricter Environmental Protection Agency standards at the city’s two sewer treatment plants — wrapped up in September, according to David Jurgens, utilities director.

By The Numbers

Monthly Sewer Payments

Monthly sewer payments for a single-family household with a three-quarter-inch meter that consumes 5,000 gallons of water per month have increased 55 percent since 2001.

• 2001: $21.20

• 2002: $21.20

• 2003: $21.20

• 2004: $21.77

• 2005: $23.70

• 2006: $25.86

• 2007: $25.86

• 2008: $25.86

• 2009: $30.45

• 2010: $31.24

• 2011: $32.02

• 2012: $32.99

Source: City of Fayetteville

The city’s most expensive capital improvement project to date paid for a new West Side Wastewater Treatment Plant, upgraded the city’s other sewer plant on Fox Hunter Road, installed or replaced nearly 35 miles of pipes and built nine pump stations.

The project nearly doubled the city’s sewage capacity by adding a second plant. Jurgens said at times prior to that, the Noland Wastewater Treatment Plant was operating at more than 100 percent capacity, and the city’s network of aging sewer pipes was prone to leaks and rainwater infiltration.

Voters first authorized $125 million in sales tax backed bonds to pay for the project in 2001. At that point, construction was expected to be completed by September 2005. Following delays and errant cost estimates, former Mayor Dan Coody’s administration went back to voters and won approval for an additional $42 million in bonds. The West Side sewer plant opened in May 2008.

Although construction is now completed, debt remains. According to Paul Becker, city finance director, it will be at least 2014 before debt associated with bonds authorized in 2001 is retired. Becker said he expects debt associated with bonds authorized in 2006 to be paid off by 2021.

Total debt is about $59 million, Becker said.

The bonds are being financed using three-quarters of the revenue from a 1 percent sales tax the city uses for debt reduction.

When all 2001 debt is paid, the full 1 percent will go to the remaining 2006 sewer debt and the city’s transportation bond program — a $65.9 million voter-approved series of street projects. Projects include improvement to Crossover Road, Garland Avenue and Van Asche Drive; a roundabout near Washington County Regional Medical Center; and a “flyover” bridge connecting College Avenue to westbound lanes of traffic on the Fulbright Expressway.

City officials are waiting for the initial sewer debt to be retired before issuing a third phase of transportation bonds.

Becker said, in addition to sales-tax-backed bonds, the city also paid about $10.3 million in interest and used $5.3 million from the water and sewer fund; $1.6 million from the water and sewer capital improvement fund; and $2.5 million from impact fees on development to finance the sewer project.

The water and sewer fund money came mostly from income generated by Fayetteville customers.

Sewer rates for a homeowner with a three-quarter-inch meter who consumes 5,000 gallons of water per month have increased $11.79 — or 55 percent — since 2001, according to the city’s utility billing division.

Jurgens said rate increases in large part were associated with the increased operational, maintenance and billing costs associated with nearly doubling the city’s sewer capacity.

“Very little of what you pay in your bill paid for this (Wastewater System Improvement) Project,” Jurgens said.

With more sewer capacity there are more meters to read, more pipes to clean, more hydrants to maintain and more bills to send customers, Jurgens said. He added the general cost of doing business — for example, the price of chemicals used for odor suppression — has also gone up since 2001.

Becker said, without committing sales tax money to the project, rates would have gone up much more.

Jurgens said $1.5 million remains of the $5.3 million transferred from the city’s water and sewer fund. He said that money will pay for a range of projects aimed at improving water quality in expectation of stricter phosphorus limits from the EPA in the coming year. That $1.5 million could be used to replace filters at the Noland sewer plant, dredge Lake Sequoyah and rebuild stream banks along the White River.

Major upgrades to the city’s two sewer plants that would be needed if stricter permits are issued could cost tens of millions of dollars, Jurgens said.

Jurgens, who began working on the sewer project in 2005, said he is relieved to have all work completed.

“I came in on a project that was frankly a mess,” he said. “We evaluated the project, made a realistic appraisal of what it would take to finish it and got it done.”

Becker said that, while sewer project work may be complete, “We’ve got plenty of stuff to do.”

“We have the rest of the bonds to issue for (the) transportation (bond program) and a parking deck,” Becker said. “We’re still busy.”

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