Photo by Jon Anderson
Inverness sewer plant 8
Sewage makes it way through the city of Hoover's wastewater treatment plant in Inverness on Thursday, March 1, 2018.
The Hoover City Council on Monday night voted to create a three-person Inverness-Riverchase Sewer Board to oversee the sewer systems that serve those communities and Southlake and help determine their future.
The board technically is a nonprofit governmental utility services corporation (often referred to as a GUSC), and it will be charged with recommending a strategy to take care of the needs of the aging system while balancing that with the needs of Hoover residents.
The Inverness and Riverchase sewer systems serve roughly 4,500 residential customers and about 200 commercial customers. Those customers include about 15% of the households in Hoover and about 950 households outside the city limits, City Administrator Brian Muenger said.
But for many years, the city as a whole has had to subsidize the operations of the sewer system (about $1.3 million) annually, and the city has more than $20 million in sewer-related debt and faces tens of millions of dollars in future capital and compliance costs, city officials said.
The Hoover City Council a year ago approved $6.1 million in emergency upgrades for the sewer system after aging equipment failed, but the system faces additional capital needs ahead as sewer plant equipment, pump stations and distribution lines continue to age, Muenger said.
The system currently is fully compliant with state and federal regulations concerning its output and is not having widespread issues with sanitary sewer overflows or mechanical failures, but time is not on its side, Muenger said.
“It’s not going to get any better. These things will continue to decay,” he said. “Proactive maintenance is always important with infrastructure. There is no area where it is more important than sewer. … Sewer is not something you can afford to get behind on.”
The Hoover City Council in June 2021 voted to raise sewer rates for customers of the system over three years, but the system still isn’t bringing in enough money to break even and cover capital costs, Muenger said.
The city can continue to subsidize the sewer system with its general fund or potentially expand the system in some way, but opportunities for expansion look limited, he said.
Hoover Mayor Nick Derzis, in a written statement, said the sewer system is not on a sustainable path.
“Doing nothing is not an option,” Derzis said. “We are taking action now — before a crisis — so we can protect our residents, stabilize our infrastructure and strengthen Hoover’s financial future.”
The new three-member board, in conjunction with a working group of key city staff, will assess the situation thoroughly and make recommendations to the City Council, Muenger said. “A level of detail and focus is needed on this,” he said.
The three people appointed to the board — Dr. Elizabeth Martin, Robert Fowler and Scott McFadden — all have professional expertise that lends itself to this kind of responsibility, Muenger said. One is a physician, one is an attorney and the other has financial expertise.
Key city staff will provide guidance, and a company called Waggoner Engineering is serving as a consultant and doing an inventory assessment of the sewer system, Muenger said.
Right now, the sewer system is functioning at only a small fraction of its capacity, he said. It can physically handle 5 million gallons of wastewater a day, and it has a permit to handle up to 3 million gallons of wastewater a day, but the actual amount being processed is less than 1.5 million gallons a day, Muenger said.
While the system can handle more customers and more customers would be good to help bring in more revenue, geographical expansion opportunities appear to be limited, he said.
“There is no proposal whatsoever to go up on rates, nor do I anticipate that one will be forthcoming in the immediate future,” Muenger said.
“Any future recommendations will include structured and predictable rate policies,” the city said in a written statement.
While the city likes to pay for capital improvements with cash when possible, sewer system improvements are hard to fund with cash, and borrowing money is an option, Muenger said.
The sewer board may consider borrowing money from the state revolving fund that provides rates below the private market, and there is potential for some loan forgiveness with that state fund, he said.
The action approved by the City Council Monday night did not transfer any assets to the sewer board. The city for now maintains control of the sewer assets, but the City Council likely will be asked to transfer those assets to the sewer board by the end of this year, Muenger said.
“A potential disposition of the system” also is on the table, according to a written statement provided by Muenger.
Derzis, in his written comments, said “our responsibility is to act early, act responsibly and act in the best interest of our citizens. This process ensures we take a thoughtful, transparent approach to solving a serious long-term challenge.”
