Atlanta water, sewer rates among nation's highest

Atlantans already pay more than people in other major cities to flush their toilets or turn on their taps: 108 percent more than in New York; 98 percent more than in Nashville; 144 percent more than in San Antonio.

As high as city water and sewer rates are now, they will increase even more in coming years: The city has already scheduled hefty rate increases for each of the next two years.

And more will follow.

“This is ridiculous,” said Wendell Bryant of East Atlanta after opening a $218 water bill for August. “I love living in Atlanta. I love Atlanta. But they have to come up with another plan. It can’t continue at this rate. Nobody will be able to afford to live in the city.”

The extraordinary cost of water and sewer may also form a knot in the stomach of Atlanta’s next mayor, who will be elected in November. The city is in the middle of a $4.1 billion project to overhaul its system, and the new mayor must manage that system while also presiding over future rate increases to pay for it.

Those costs of the Clean Water Atlanta initiative will burden a generation of city residents, workers, property owners and others as repayment of the debt stretches out over the next four decades. The $4.1 billion effort is creating a vast network of new pipes, lift stations, sewage treatment plants and other facilities that will cost millions every year to maintain.

“It’s a generational expense for a generational asset and generational benefits,” said Rob Hunter, commissioner of the city’s Watershed Management Department. “Unless you want the water and sewer system to get in the condition they were in, you need to invest in it.”

The stakes are enormous. Without water and sewer capacity, the city can’t continue to grow. Still, the costs of the system are so exorbitant that officials fear rising sewer bills will drive residents out of the city.

For example, an East Lake resident in Atlanta who pays the average $110 city sewer bill could move one neighborhood east — into unincorporated DeKalb County — and pay about $63.

“This is a huge part of our everyday lives,” said Councilwoman Carla Smith, who chairs the city’s utilities committee. “We have to get it right for the city to prosper. It’s a multilevel service for all of us. And we have to get every step correct, from customer service to resolving the water wars. If any one of these fails, the whole thing topples.”

The new mayor will choose whether to retain the utility managers Mayor Shirley Franklin has put in charge of the program, whether to keep much of the professional expertise in the hands of contractors rather than city employees and how to address residents’ continuing complaints about billing problems, malfunctioning meters and indifferent customer service.

The mayor will also have to consider, during a recession, whether to start a “stormwater utility” — a system for the safe disposal of rainwater — and impose a new fee to pay for it. Atlanta’s system of stormwater pipes will require billions more to repair, and the city has no way to pay for the work. But Atlantans saw the urgent need for stormwater repairs two weeks ago when record rainfall overwhelmed the city’s ancient stormwater system and caused localized flooding.

$3.4 million in lobbying, $6.7 million in federal aid

When Franklin took office nearly eight years ago, the city’s sewer system was leaking sewage into streams and yards and pouring filth into the Chattahoochee River. And, lack of sewage capacity threatened to halt building in parts of the city.

The city’s water system was in the hands of a private contractor, whose work was much maligned across the city.

Lawsuits ended with two federal court orders requiring the city to clean up its sewers after years of neglect. Franklin’s predecessor, Bill Campbell, chose to pay fines rather than begin the pipe repair work. But he wasn’t the only leader who failed to resolve the issue. City officials say Atlanta failed to invest in the system for decades. Some major projects didn’t really fix key problems. Millions went toward projects that were later abandoned.

Franklin assumed the title “sewer mayor” and made the Clean Water Atlanta program a cornerstone of her administration. She severed ties with the private contractor running the water system. The mayor also picked an expert panel to review the sewer repair program.

Originally the mayor said ratepayers should expect to pay $1 billion of a $3 billion program. She argued that even that burden was unfair when other cities in similar situations received hundreds of millions of dollars in federal aid.

She said she expected $1 billion each from the city’s state and federal “partners.” But the city could never get that kind of help. The state provided $50 million a year in low-interest loans over 10 years. And, legislators approved a sales tax for sewers that allowed city residents to tax themselves. But the state has balked at any grants.

Bert Brantley, spokesman for Gov. Sonny Perdue, said there’s not a revenue source or even a process he’s aware of for the state to grant Atlanta money to offset its sewer costs.

“You know the state’s money is taxpayer money as well,” Brantley said. “It’s not like it comes from somewhere else.”

In fact, the state has spent billions of dollars in recent decades on building local roads, new bridges, the Georgia Dome and the Georgia World Congress Center.

Franklin has made several trips to Washington to lobby for the city’s sewer program. Sometimes she has taken Watershed staff and council members along. The city even put together a petition drive.

All that work is coordinated by a team of paid federal lobbyists.

Still, between 2005 and 2008, Atlanta reported winning just $6.7 million in federal aid while spending $3.4 million lobbying for that aid.

Help from Congress?

City officials complained that they’ve faced, for most of Franklin’s tenure, a hostile Republican administration not willing to help a Democratic-voting Southern city. They say the Bush administration was focused on wars abroad after Sept. 11, rather than on the needs of local governments.

In addition, they say, Georgia’s congressional delegation has lacked either the inclination or the clout to help the city with its sewer program.

“We heard a lot from our federal lobbyists that if we did our part, help would come,” said Clair Muller, a councilwoman who has been involved in water and sewer issues for a decade. “It just never did.”

U.S. Rep. John Lewis, an Atlanta Democrat, said Franklin’s frequent trips to Washington have helped Congress understand the city’s needs. Still, he said, money was tight before and remains so now.

“She is highly respected and the need well-known,” Lewis said. “But we are competing against cities like New York, Chicago and Minneapolis.”

U.S. Sen. Johnny Isakson, a Georgia Republican, said Franklin deserves praise for taking on the sewer system repairs. He said congressional appropriations of about $15 million for the program in the past eight years are as much as the city can hope for.

“You just can’t expect the federal government to take over the liability for the sewer system,” Isakson said. “If the government started appropriating billions for municipal water and sewer systems, there’d be no money left.”

There has been discussion within the Obama administration of creating a federal infrastructure program that could eventually help cities struggling to pay for such projects.

Right now, however, no one knows what that might look like or how much money would potentially be available.

“The day will come,” Lewis said. “Hopefully sooner rather than later.”

Among most costly

So, at least for now, Atlanta ratepayers are shouldering nearly all of the burden.

Rate increases already approved will make the average water bill jump to $151.92 from $49.60 per month — a 206 percent increase — during the decade that ends in 2012. The rate already in place puts Atlanta at or near the top nationally for water and sewer bills. The city jumps even higher when the sales tax for sewers gets added in.

Those numbers have some city leaders fearing what that could mean for Atlanta’s future.

“I’m not sure being No. 1 in the country for water and sewer rates is a good selling feature for Atlanta,” Muller said. “You have to look at how much the public can bear. We are already there.”

Wendell Bryant, the East Atlanta resident with the $218 water bill for August, has lived in Atlanta since 1997. He remembers paying less than $50 a month before the rates started jumping to pay for the Clean Water Atlanta program.

“I can only imagine how some of the older people on fixed incomes deal with this. How do you go from paying $50 a month to more than $200?”

Because it is paying for the whole program, the city has taken on massive debt.

By 2014, when the program is supposed to end, Atlanta could be holding close to $4 billion in debt that will take up to 40 years to pay off. The final payback with interest included will be more than $7 billion, officials say. The city payment on the debt in 2009 will exceed $153 million.

Hunter said the huge debt load is the best option. Because the improvements will benefit generations, generations should pay for them, he said.

“Certainly the level of what’s been spent per year will peak and decline,” Hunter said. “But it will absolutely never go down to zero. You are not going to see the rates go down in 2014. You still have to pay for the bonds.”

What overhaul entails

The project breaks into two distinct components. The first, already completed, dealt with combined sewers. Those pipes, which covered about 15 percent of the city, were concentrated underneath Atlanta’s oldest neighborhoods. They carried both sewage and stormwater.

Environmental advocates wanted city officials to separate the pipes to keep sewage out of stormwater. Franklin chose a less costly option that retained some of the combined pipes. The other work focuses on the pipes that were already separated but had leaks, overflows, cracks and insufficient capacity. Watershed officials had to spend more than $20 million to conduct an assessment of the network to direct repairs and replacements.

Atlanta’s water/sewer bills

Over a decade, Atlanta’s water/sewer bills will more than triple as the city raises rates to pay for the city’s $4.1 billion overhaul of its water and sewer network.

* Assumes consumption of about 6,000 gallons of water per month.

** No increases have been scheduled beyond 2012, but the new mayor and City Council will have to enact them to cover the city’s debt payments.

Source: Atlanta Watershed Management Department

How we got the story

The Atlanta Journal-Constitution reviewed public documents that lay out budgets, projects, schedules and other details for the Clean Water Atlanta Project. It also conducted detailed interviews with regulators, customers, legislators, city officials and water system managers. The city’s consultants as well as officials from other cities provided data on where Atlanta’s rates rank nationally.

About this series

Atlanta has always been a city with vision — the kind of vision that concocts the world’s favorite soft drink, sees beyond race, invents cable news, produces the world’s largest airport and hosts the Olympics. But it takes more than vision; it takes a commitment to solve problems. On Nov. 3, Atlanta will choose a new mayor for the first time in eight years — a change of guard that comes at a critical juncture. A veteran team of AJC reporters is looking deeply into the key challenges ahead, issues that resonate far beyond Atlanta’s city limits. A team of outside experts also will offer its suggestions and solutions.

Nov. 1: Advice from experts, who will offer their solutions to city woes.