Columbia water and sewer customers could see a 5 percent rate increase beginning July 1 to support an ongoing $663 million upgrade to a system where two-thirds of the pipes are more than 50 years old.
It would be the third increase in four years, with two more expected by 2012, for a total of 25 percent.
Council members were supposed to raise rates last year but did not because they feared the increase would be too much for a state that, at the time, had the nation's second-highest unemployment rate.
The city already has borrowed $270 million of the $663 million plan and is scheduled to borrow $105 million more before June 30, the end of the city's budget year. That's why city manager Steve Gantt wants council to increase the rates this year.
City officials must convince lenders they can pay the money back before they can borrow it. To do this, the city's water and sewer fund has to abide by a simple rule: The utilities have to earn twice as much money as their loan payments.
Without a rate increase, the city's planned $105 million loan this year could push the city past that ratio. Breaking the ratio would affect the city's bond rating, which would affect how much interest the city has to pay when it borrows money.
"Ultimately it would cost the taxpayers more money in the long run not to raise the rates," said Councilman E.W. Cromartie.
Councilwoman Tameika Isaac Devine said she would like to study the issue before making a decision but added her initial reaction is "the economy is no better this year than it was last year."
"If it's not absolutely mandatory that we do it to keep our rating and do the issuance that we planned, I think it's a bad time," Devine said.
If the city doesn't borrow the money, it will have to delay until at least 2012 scheduled improvements to its aging water system - including a $15 million upgrade for Chapin customers.
The small town in northern Lexington County gets nearly all its water from a 16-inch pipe in Columbia's water system. If the pipe breaks, as it has been known to do, Chapin's roughly 3,000 customers have no water.
Officials want to fix that by adding a second pipe and pay for it with part of the $105 million loan.
Columbia Mayor Bob Coble, who is not seeking re-election, said he supports the rate increase.
Coble's term ends June 30, which means he would vote on the rate increase because it must be decided before the start of the budget year July 1.
"You have to continue to build on the system and improve the system, and the rate increases are just part of that," said Coble, who last year voted not to raise rates.
In 2008, the city's 5 percent water and sewer increase brought in an extra $37 million in revenue, which allowed the city to borrow $81 million last year for several water and sewer projects.
City officials plan to begin the largest of those projects this summer: a $40 million upgrade to the city's wastewater plant. It will be the single-largest wastewater project in the city's history, according to John Dooley, the city's director of utilities and engineering.
The project, which is expected to take between 2 1/2 and 3 years to complete, would replace the sewer plant's headworks facility.
All of the system's wastewater - including storm water, dish water, bath water and toilet water - enters the plant through the headworks, where up to four giant screw pumps pull the wastewater up into the plant. From there, machines remove grit and debris before sending the water through one of three treatment facilities to purify it before discharging it into the Congaree River.
The plant has four screw pumps, named because they resemble rotating screws. Each pump can handle 20 million gallons of wastewater per day, giving the plant an overall capacity of 80 million gallons of wastewater per day.
But some days, because of high usage or heavy rains, the plant can get as much as 150 million gallons of wastewater in one day.
When that happens, it backs up the system's two main lines: a 60-inch pipe coming from Northeast Richland and a 54-inch pipe running along Gills Creek.
Too much backup could cause sewage overflows through manhole covers.
"There has been an increase in overflows lately," said Jessica Artz, program director for the Gills Creek Watershed Association, which advocates for the Gills Creek Watershed, a 47,000-acre swath of Richland County land that includes 70 miles of streams and lakes.
"With all the rain we've had lately, it's become evident we've got some major, major problems with the wastewater treatment system," Artz said.
But the sewer plant's new headworks will have screw pumps capable of pumping 150 million gallons a day. And if that's not enough, the pumps will allow workers to pump more wastewater to the plant's 24-acre retention pond, which can hold more than 140 million gallons of wastewater. Workers use the pond as a holding tank until the demand dies down, then they pump the wastewater out of the pond to begin the treatment process.
"Water quality is such an important issue," Artz said. "If people consume (contaminated) water, they can get sick. It's worth our extra fees to make sure the public is safe and healthy."