Study recommends changes in utility rates, policies

Sewer rates need to be raised in 2010 to help pay for an upgrade to the Winslow Waste Water Treatment Plant, according to a utility rate study released last week, but the water and storm-water utilities won’t require any change.

The report prepared by Seattle-based FCS Group said sewer rates should increase by 31 percent in 2010, with incremental escalations of less than 1 percent to follow over the next four years. The report also said that across-the-board increases in water and storm-water rates aren’t necessary.

It remains unclear when the City Council will actually begin debating the study.

Andy Maron, chair of the Utility Advisory Committee, said the council has given the UAC until October to form recommendations to bring to council and committees. The UAC will discuss the study at least two more times – on Sept. 10, and again on either the last week of September or the first week of October.

According to the study, customers in the Winslow area would see an increase of 26 percent in 2010. Customers using the Sewer District Seven Waste Water Treatment Plant would see a 34 percent increase if they don’t use grinder pumps, or 40 percent if they do.

Councilor Bill Knobloch, who serves as the council’s ex-officio of the Utility Advisory Committee, said the report doesn’t answer the question of whether utility costs are being allocated equitably.

Knobloch, a Central Ward representative, said he expects to receive many calls from constituents about the large increase in sewer prices.

The report shows an average Winslow customer in a single-family dwelling – currently paying $65 in sewer costs – would pay about $82 in the future. Of that $17 increase, $11 would go toward the treatment plant upgrade, which is needed in order to meet state regulations; the upcoming Winslow Way reconstruction process would receive $3. The remainder of the money would go to replenishing the reserves of the ailing sewer fund.

Earlier in the year, the city had to execute an interfund loan from the water utility so work on the treatment plant project would continue. It remains unclear how the loan will be covered. At a recent Finance and Personnel Committee meeting, Knobloch asked City Finance Director Elray Konkel how the money will get repaid. Konkel said a bond would replenish the water funds, but the city says it is unable to secure the bonds because of current litigation involving the treatment plant.

The rate study was one of the key pieces of a lawsuit filed by the Bainbridge Ratepayers Alliance against the city in April. Sally Adams, secretary for the ratepayers, said it’s still uncertain whether or not everyone is paying their fair share.

Knobloch said a city-wide audit would help clear up the concerns of shared costs, and would also satisfy one of the ratepayers’ key demands in the lawsuit.

Barry Peters, chair of the Finance Committee said sewer projects will always be difficult on Bainbridge.

“I think we’re dealing with the problem that we’re an island,” he said. “We have to do all of the utility processing ourselves. We’re different from cities on the Seattle side that can send their sewers to King County or some other large treatment facility.”

Along with analyzing rate prices, the report proposed several changes to city policy on the collection of utility money, one of which is a recommended shift in the collection structure to focus more on usage rather than a large flat fee.

“It makes a difference for a low-water user,” said Karyn Johnson, who presented the project for FCS Group at a joint meeting between the Personnel and Finance Committee and the UAC earlier this month.

She added that under the current structure, restricting usage isn’t rewarded.

“It also provides less incentive to conserve water,” she said.

The presenters urged the council to switch to a system where approximately 70 percent of the water bill is a volume charge, with the other 30 percent being a lower flat fee.

Following a meeting with FCS last week, one of Peters’ greatest concerns was how the fixed and volume charges could be balanced so that residents are rewarded for water conservation and the city is assured of a certain amount of base revenue for the water utility.

Within the water utility, prices would change for each customer class. The greatest change stems from the removal of fire protection, which, as stipulated by a recent state Supreme Court case, must be paid for by the city.

Of the four classes, commercial and multifamily properties paid the majority of fire protection. The removal of fire protection would lead to a savings of 9 percent for multifamily, and 18 percent for commercial.

Single-family homes stand to see the largest increase. In total, homeowners should see a 10 percent rise in their water bills, but Johnson pointed out that more than half of the users at current consumption could actually see a lower bill.

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