POULSBO — After being passed for years and years, the water and sewer rate buck will stop with the city council later this year — and none of its members are too happy about it.
Faced with an inequitable rate system, which favors commercial ventures over residents and waste over conservation, the council realized Wednesday night that it must take action to rectify the situation. The fix won’t be easy and will mean higher costs for businesses if a recommended plan from Ed Cebron of Financial Solutions Consulting Group, Inc. and a special citizen advisory committee is accepted.
The group met twice over the past month and a half, discussing and tweaking an earlier FSCG proposal that had been presented to council. While “sticker shock” is anticipated in many cases, other charges will actually be decreased under the new rate system.
While the proposed rates represent a huge increase in some cases, and minor reductions in others, they also only fund infrastructure replacement at the 75 percent level. The advisory committee had toiled with this point during its last two meetings before recommending that water and sewer ratepayers be hit with respective increases of 10.27 percent and 4.18 percent in 2002 and 3 percent annual boosts thereafter.
This “stable” rate increase, Cebron said, was much more acceptable than a previous version of the plan, which included significant hikes each year until the entire system was fully funded.
The change caught the attention of City Councilwoman Jackie Aitchison, who remarked, “I ‘m really glad to see this. This looks so much better than what we had before.”
But even though the water and sewer funds will be “deficient” — with annual expenses higher than revenues — for several years, the council can always revisit rates later and raise them to meet existing needs.
Under the proposal, fixed water rates for single-family residential would drop from $15.99 per month to $9.33 but charges for volume would increase more realistically depending on usage. The volume charges are higher, Cebron admitted, but they also promote water conservation more than the existing structure.
“The changes to this rate structure will bring actual costs back into line with what people are using,” he explained. “Customers who are conserving water right now are overpaying under the current structure.”
Cebron said expenses could be decreased further if the customer opts to reduce the size of the water meter on the property.
The main rub with the water portion of the plan related to high summer usage charges, which would be set at a standard rate of $1.80 per 100 cubic feet up to 1,000 cubic feet and $2.42 for every 100 cubic feet of water used thereafter.
“What about the school district?” Aitchison asked.
“Actually, the school district would benefit from that because their usage will be down in the summer,” explained Public Works Supt. Bill Duffy, who added that the North Kitsap School District’s highest usage was between September and June when classes are in session. “These rates are really set up to promote conservation. The base rates were so high before if you conserved you really didn’t see much savings.”
While the proposed water changes had some significant impacts on both residences and businesses, Councilman Dale Rudolph was very concerned about the effect that new sewer rates would have on local commercial ventures.
The current water rate for residents using 700 cubic feet of water is about $19.75 per month, while this would drop to $17.84 in the winter it would also increase to approximately $20.23 in the summer. Commercial businesses, using 5,000 cubic feet pay some $59.50 right now and would see hikes to $70.76 in the winter and $99.90 in the summer.
On the flip side, sewer rates for residents using 700 cubic feet would drop from $44.92 to $36.36. Businesses using 5,000 cubic feet would take a huge hit under the proposal, with a boost from $67.20 each month to $208.40.
“We’re not trying to drive business out of Poulsbo,” Rudolph remarked, explaining that many enterprises would be feeling “sticker shock” under the proposed plan.
Councilman Ed Stern concurred that an uproar was in the wind but disagreed with Rudolph’s suggestion that the new structure should either be delayed or phased in.
“This is an enterprise fund,” Stern said, explaining that water and sewer revenues have to support it. “We can’t postpone it — there’s no room for luxury. That luxury has been taken by mayors and councils for the past 20 years.”
“For years, our commercial businesses have not been paying their fair share,” Aitchison said, backing Stern’s stance to support the plan. “I have always voted against these rate hikes in the past but I don’t know how we cannot do this. I know it’s going to be hard on businesses.”
The recommendation would reduce the burden on residential users by 9.21 percent but raise commercial’s to 25.42 percent — something which furthered concerns that the business community would protest the plan.
“Business owners were invited to serve on the committee but none came,” Cebron said.
“They’ll show up when the bill arrives,” Stern pointed out.
Prior to that moment though, residents and business owners will have several chances to express their support and concerns of the proposed rate changes during public meetings, hearings and forums that will be held in the coming months.