MSD board votes on rate increase
Sewer rates and drainage fees will rise 6.9 percent starting Aug. 1, the Metropolitan Sewer District board decided on Monday.
That's the largest increase the board can impose without the approval of the Louisville Metro Council, which rejected the board's earlier vote to raise rates 20 percent to pay for a backlog of maintenance.
A typical MSD residential customer will pay about $3.38 more per month. MSD customers get combined Louisville Water Co. and MSD bills every two months. MSD rates are right at the national average, officials said.
Board members said Louisville residents can expect another attempt to raise rates as much as 20 percent next year to address what they described as a serious backlog in needed renovations to aging and failing flood protection and sewer systems. MSD Executive Director Tony Parrott said his staff is developing a strategy to take MSD's case to the public and Metro Council over the next six to nine months, to make a case for higher rates.
No Metro Council member agreed to sponsor an ordinance that would allow for the 20 percent rate increase, saying their constituents would not support it and that MSD had failed to sell its plan to the public. Mayor Greg Fischer was also opposed, agreeing that MSD needed to do more community education.
Board member John Phelps, an engineer, said critical MSD facilities that safeguard the public have "reached the point of imminent failure." He cited devastating flooding this year in Houston, Louisiana and West Virginia – more than 20 people died in recent days from flooding in West Virginia – as examples of what could happen locally.
"My fear is that we are going to go down this path of 6.9 percent rate increases, and we are going to end up with a catastrophe that is much more costly," Phelps said, adding that he was disappointed that Mayor Greg Fischer and Metro Council didn't back the bigger increase.
The engineer also threatened to vote against the 6.9 percent increase, saying his profession's code of ethics demand he support a higher rate increase for public safety.
But MSD's finance director Chad Collier said MSD can't delay even a month without putting the breaks on current capital spending mostly associated with an $850 million federal consent decree to reduce pollution in area waterways. The agency will run out of cash in its capital budget in August, and needs at the 6.9 percent rate increase to secure another $150 million in borrowing this year, he said.
The board is scheduled to take final action on the rate plan at its July meeting.
Board member Joyce Horton Mott said MSD will get the blame during the next big flood. The public "won't blame Metro Council. They won't blame the mayor."
Board chairwoman Cynthia Caudill said the rate increase will help MSD make progress, but "I fully expect this board to (again) vote for a 20 percent rate increase next year."
Reach reporter James Bruggers at (502) 582-4645 and at jbruggers@courier-journal.com.