By Tyler Schneider
It’s easy to take for granted the bureaucratic decisions that ultimately determine the quality of municipal services we enjoy as Kansas City residents.
On December 13, KC Water’s Utility Operations Officer Charles Stevens spoke at the South Kansas City Alliance meeting at the South Patrol Police Campus to outline a $750 million city revenue bond issue to be voted on by KCMO residents on April 5, 2022, for the purpose of “rehabilitating, expanding and improving the city’s sanitary sewer system.”
The revenue bond issue can be approved by a simple majority in the April 5 municipal election, and if approved, Stevens said the bonds will be paid off over 25 years.
If passed, the bond issue will allow the city to stay on track to meet the legal obligations of a modified federal consent decree first agreed to with the U.S. Environmental Protection Agency (EPA) in 2010 to greatly reduce overflows containing untreated sewage from the city’s obsolete combined wastewater and storm water sewer system during heavy storms into city streams and rivers.
Funding from a similar $500 million revenue bond issue overwhelmingly approved by KCMO voters in 2012 to reduce overflows was exhausted in April of this year.
Overflows were estimated to average 6.4 billion gallons a year. Following passage of the federal Clean Water Act in the 1970s, the EPA required remediation of combined sewer systems to reduce such overflows.
The city’s outdated combined sewer system covers older parts of the city such as the old northeast area, stretching south from the Missouri River to about 85th St. and from the Kansas border on the west to the Blue River on the east. It includes about 58 square miles and about 1,060 miles of sewer pipe, and the oldest part of it along Main St. dates back to 1857.
The parts of the city north of the Missouri River and south of 85th St. and east of Raytown are served by newer separate sewer systems dating back to the 1960s. This area covers about 260 square miles and includes about 1,750 miles of sewer pipe.
KCMO originally entered into a $4.5 billion 25-year agreement with the EPA in 2010 that required the city to make steady progress in significantly reducing wastewater overflows to streams and rivers.
The cost of the original agreement proved burdensome for KC Water’s customers, and a 2016-17 citizens task force recommended the city renegotiate the agreement.
Earlier this year the city agreed to a third amendment to the consent decree that greatly lowered its projected cost and gave the city five more years to achieve the required reduction in overflow volume.
It also allowed the city to utilize the knowledge it gained from earlier phases of the program to develop community-enhancing green solutions to reduce the amount of storm water entering the combined system, thus reducing the need for the much more costly replacement of undersized pipes.
Under the amendment, overflow volume is to be reduced by 66 percent by the end of 2024, 74 percent by the end of 2030, 77 percent by the end of 2035 and reach its final goal of 85 percent by the end of 2040.
Stevens said approving the low interest revenue bonds will allow KC Water to keep annual rate increases for wastewater service to no more than 6 percent. (The wastewater portion of water bills averages about 61% of residential water bills.)
The city also intends to utilize a state revolving fund specifically for water department capital improvements and other subsidized funding as well as any available grants from federal pandemic relief and infrastructure bills to lower the cost to KC Water customers.
The amended agreement will reduce the total projected cost of the program from the original $4.5 billion price tag to $2.3 billion.
“The bond question is really about financing, not specific projects,” Stevens said, adding that the city council would have the final say on any specific projects funded by the bonds.
Stevens stressed the importance of securing funding through voter-approved revenue bonds, as opposed to costlier methods of financing, since this will result in much lower interest rates and bring in the greatest potential for state and federally subsidized financing to offset some of the financial burden on ratepayers.
It also spreads out the cost of sewer improvements over a much longer period of time than pay as you go financing so future KC Water customers who will benefit from the improvements will share in their cost rather than putting the entire burden on current customers.