Setting aside money to repair Douglas County's North Valley Wastewater Plant will result in higher rates for its 1,705 sewer customers.
It has been 13 months since the county raised sewer rates to $51.02 a month, according to Public Works Director Carl Ruschmeyer, who is making a presentation on the rates at Douglas County commissioners' meeting on Thursday.
Ruschmeyer said Monday that the county subsidized the plant $350,000 last year and will spend another $250,000 to keep the sewer plant in the black this year. That subsidy will drop to $100,000 next year and will be eliminated after that under a directive that all the county's utilities be financially self-sufficient in an effort to reduce their cost to taxpayers.
The process for the county's water systems has been a rocky one.
The sewer plant serves much of the Johnson Lane area and the western part of Carson Valley from Genoa north. Residents of the Indian Hills General Improvement District are served by their own sewer plant.
Besides the transfer of administrative costs to sewer customers, Ruschmeyer said depreciation is driving the rate increases which will go to $58.09 on March 1, 2011, if approved by county commissioners and then to $70.07 a month on June 30, 2012.
According to Ruschmeyer's report, rates would reach $89.15 a month by 2015 if approved.
Without the rate increases or depreciation, the plant will start operating in the red starting in 2012.
The issue for the sewer plant is similar to that facing various water companies the county operates. During its last boom year in 2007, the county collected nearly $400,000 in connection fees, some of which was used to subsidize the plant's operation instead of being saved for depreciation or expansion.
The county had set aside no money for the plant's depreciation and with growth at a virtual standstill, the plant lost $66,621 in the year ending June 30, 2008.
"We've relied on interest and connection fees to cover the budget for years," Ruschmeyer said at an earlier presentation. "We can't continue to do business as we have in the past. We have to do a substantial rate increase to get the fund healthy."
The North Valley plant, located at the north end of Heybourne Road, is the only sewer plant operated by the county.
The Minden-Gardnerville Sanitation District operates the plant located at Ironwood and Highway 395, and serves Minden, Gardnerville, and the Gardnerville Ranchos.
