The battle over who should pay a major share of Omaha's $2 billion-plus sewer system overhaul may be nearing an end.
On Tuesday, after months of talk of lawsuits and threats that big industries would lay off workers or leave the city over skyrocketing sewer rates, business leaders, city officials and the Greater Omaha Chamber of Commerce said they agreed to a new funding plan. The proposal was signed by Mayor Jim Suttle,
Chamber President and CEO David Brown, an attorney representing 13 major industrial sewer users and a mediator who oversaw talks with the groups.
The new rate outline, which would still need to be approved by the Omaha City Council, came out of about two months of mediation.
It would have commercial and industrial customers' rates grouped by the size of their water meters and capped at a certain level. That means the handful of large users who would have paid tens of millions of dollars now would have smaller bills.
As the funding stands, 19 of the more than 13,000 commercial customers in the city would pay 5 percent of the total cost.
Residential users' rates won't be affected, but it appears commercial users would pay more to make up the difference.
A statement released by the chamber Tuesday did not provide specifics on how much the industrial users would save, or how much other users' rates would change.
Julia Plucker, an attorney representing the Save Omaha Jobs Coalition, said the city and the Metropolitan Utilities District are still ironing out the details. But she said it's clear the companies her group represents — which include Skinner Baking, Greater Omaha Packing and Kellogg's Omaha — would be responsible for less than the approximately $150 million they'd previously been asked to pay.
“We anticipate that our bills would go down a significant percentage,” she said.
Under a rate plan approved by the city in 2009, which runs through 2014, rates will go up each year. About 63 percent of the bill is to be paid by residential customers, with rates expected to increase from $24 to $37 per month by 2014 and to $50 by 2017.
Large industrial users, including hospitals, would pay 3 percent of the total, while neighboring communities would pay 9 percent. Non-industrial commercial customers would cover the remaining 20 percent.
Under the tentative agreement, industrial and commercial users would be combined into one group and divided up by the size of their water meters. Users with large meters (6, 8 or 10 inches) would be charged at the 4-inch meter rate.
Half the bill would come from a fixed charge, with the other half from how much wastewater the user puts into the system.
Suttle spokeswoman Aida Amoura said the mayor is pleased that business leaders have been able to come up with a good solution.
“We worked on this for two years,” she said. “Our goal was to make sure it was fair and equitable for all of the businesses.”
The 18-year sewer project is overseen by state and federal environmental regulators. The total cost is still uncertain — the city's estimates put it at about $2 billion, but a chamber report put the number closer to $3 billion, including financing costs.
As recently as July, some of the large industrial users said they were seriously considering moving their operations out of Omaha because of fees associated with the project.
Plucker said the tension continued through the early stages of mediation talks. The new proposal was in the works by early August, and she said all 13 members of her group are on board.
“If this goes through the City Council and the rates are as we expect them to be, we think we're back in a competitive environment,” she said.
The proposal also has the support of Councilwoman Jean Stothert, the head of the council's Public Works Committee.
“The concept in the proposal would provide a way to meet our goals: preserving Omaha jobs, making the fee more fair and equitable, and protecting the current rate structure for homeowners,” she said in the chamber's statement.
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