New sewer plan and inflated sewer rates | LETTER TO THE EDITOR

Published 1:44 pm Monday, March 23, 2015

To the editor:

The city has its new sewer plan on its Tuesday, March 24 city council agenda calendar, and every city sewer ratepayers should either write the city council or come to city hall and stand at the dais to express their opinion to having a $274,000 consultant prepared sewer planning document that fails to have a financial efficiency analysis included as part of the financial and rate setting section of the plan.

When the city’s water utility underwent such financial scrutiny prompted by a contentious and very expensive utility ratepayers lawsuit, city water rates were reduced by 61 percent.

The same consultant that performed the financial efficiency study for the water utility did the financial section of the new sewer plan, but city staff did NOT ask the for a financial efficiency analysis — essential, what would sewer fund expenditures be if the sewer operations were subject to outsourcing competition rather than be the never tested monopoly that presently exists?

The city of Bainbridge Island already has the highest sewer rates of all the Western Washington cities used as comparables in the new sewer plan.

The city currently charges 52 city employees, in part, to the Sewer Fund. Some of those are fairly minimal charges, but they add up to the equivalent of 9.5 full-time employees (FTE).

It takes three full-time employees to run the wastewater treatment plant and about 2.5 city employees to manage the electrical and physical infrastructure, coordinate engineering work, and do utility billing.

So the employee overhead for the sewer utility is about more than 40 percent. That’s excessively high for a small public utility.

In addition to those 9.5 FTE salaries and benefits being charged to the Sewer Fund, the city also charges substantial monthly city hall “rent” to those 9.5 FTEs as additional cost allocation charges.

Then a third level of overhead expenditure as the city taxes the sewer utility’s revenue at 6 percent — that’s an additional direct payment into the general fund from sewer ratepayers. It’s legal to tax local utilities, but a municipal utility tax is essentially a legal way to circumvent a prohibition that utility fees per se cannot be moved to augment the general fund.

City staff and city council do not want this to change because they, like many other Washington cities, are maximizing overhead charges the municipal utilities pay to make up for the state-imposed annual limitation on raising property taxes to increase general fund revenue.

Simplified, that means utility ratepayers are funding a disproportionately larger share of local government.

It should not be lost on the city council that a higher percentage of affordable and more modest income housing is in the city’s main sewer service area.

As an addition kicker to sewer ratepayers, the new sewer plan calls for substantial sewer rate increases.

That’s even tougher to swallow since there is a current balance of more than $3 million in the Sewer Fund.

Countering that recommendation will be an attached Utility Advisor Committee recommendation to keep sewer rates at current levels.

But both the new sewer plan financial report and the Utility Advisory Committee recommendation fall short of giving sewer ratepayers fair, reasonable and sufficient sewer rates.

Having paid $274,000 for this consultant work, sewer ratepayers deserve a financial plan that is fair, efficient and reasonable. That’s not what is going forth to the city council.

This is probably sewer ratepayers one and only chance to get a financial efficiency analysis completed BEFORE the city council accepts the new sewer plan and its rate recommendations.

It’s the one window of opportunity to get one more of city’s three utilities financially made whole with fair, reasonable and transparent utility rates.

ROBERT DASHIELL

Bainbridge Island