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Stormwater bubbles out of a sewer grate off East 28th Street.
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If it seems like your sewer bill keeps going up and up and up, it is.

Thanks to the magic of compounding, Chattanooga residents are on track to see their sewage bills double over about eight years from 2012, when the average city resident paid roughly $25 a month for sewer service, to 2020, when the average monthly bill should creep above the $50 mark.

That's because sewer bills have increased by about 9.8 percent like clockwork since 2012 for the city, which has some 77,000 customers, and for the Hamilton County Water and Wastewater Treatment Authority, which has 33,000 customers in East Ridge, Red Bank, Lookout Mountain, Signal Mountain and unincorporated areas of the county.

The bills are rising steadily to meet the anticipated $250 million the city will spend under a 2013 consent agreement with the U.S. Environmental Protection Agency to fix old, leaky sewer pipes so they don't let in stormwater. That water overwhelms the sewage system during storms, causing overflows of raw sewage into the Tennessee River watershed.

The latest 9.8 percent increase takes effect today.

The average 5,000-gallon user in the city will pay $46.35 under today's rate increase, compared to $25.10 in 2011 before the consent decree rate increases began, said Michael Patrick, the city's director of waste resources.

The 9.8 percent increases will continue through 2020, and then should dial back to 6 percent in 2021, Patrick said.

Officials have called the annual 9.8 percent rate increase "incremental."

But the rate compounds over time — and that adds up.

One way to look at the sewage rate hikes is through "the rule of 72," a quick way to estimate how long it'll take an investment to double. You divide 72 by the annual compound interest rate. For example, if you earn 10 percent in compound interest on an investment, your money will double in 7.2 years.

Likewise, if you increase the sewer rate by 9.8 percent annually, the average bill will double in about 7.5 years.

"For the longest time, we did not raise rates, which frankly we should have," Patrick said. "Nobody wants to pay a higher sewer bill — myself included.

"Our issue is we're just a 100-plus-year-old sewer system," he said. "Clean water is expensive. I don't know any other way to put it."

The Chattanooga City Council approved the rate hike about two weeks ago as part of the city budget, Patrick said.

The WWTA board of directors voted in 2012 to mirror the city's rate hikes, Executive Director Mark Harrison said.

"None of us like having to raise our sewer bills," Harrison said. "The sewer business is a break-even business. None of us is profiting from this."

Higher sewer bills have been especially difficult for many low-income households, especially those who fell behind on their payments when sewer and water bills were separated in 2013.

"It's seems ridiculous to me that sewer rates are higher than the cost of water, and it's causing a real financial hardship on a lot of people," said Robbie Bailey, who visited Metropolitan Ministries last week to try to get some help paying her daughter's outstanding sewer bill of more than $600.

Betty Strickland said her combined sewer and water bill for her home in Highland Park has jumped from about $25 a month five years ago to nearly $70 a month today, "and it just seems to keep going up."

The city began cracking down on delinquent sewer accounts this year. Metropolitan Ministries has laid out more more than $20,500 so far this year to help pay sewer bills and another $16,786 for their water bills.

"It's definitely more of a concern for people and is taking more of our budget," said Rebecca Whelchel, MetMin's executive director.

Both Patrick and Harrison said their respective sewer systems don't get any tax dollars, so ratepayers have to fund all the upgrades.

While WWTA followed the city's lead in rate increases, it has hired consultant John Mastracchio, a vice president at Raftelis Financial Consultants Inc., to do an independent rate study that should be completed before the year's end.

"I'm not sure if [WWTA mirroring the city's rate hike] is going to continue at this point," Mastracchio said. "It's to be determined based on the capital needs that WWTA has.

"In general, wastewater utility rates have gone up across the country by greater than the rate of inflation, because of regulatory requirements," Mastracchio said. "A lot of the systems are aging and old."

Contact staff writer Tim Omarzu at tomarzu@timesfreepress.com, at www.facebook.com/MeetsForBusiness, on Twitter @meetforbusiness or 423-757-6651.

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