UPDATE | Bainbridge Island City Council slashes water rates

The city council approved a 30-percent reduction on water rates Wednesday by a 5-2 vote.

Bainbridge Island’s city council made two significant changes to the city’s water utility Wednesday, including a considerable rate cut for customers.

The city council approved a 30-percent reduction on water rates Wednesday by a 5-2 vote.

By the same margin, a resolution affirming that the city’s utilities are to be run for the benefit of their customers was also approved.

Little was said by the council in comparison to previous council discussions on the matter.

Councilman Bob Scales and Councilwoman Kirsten Hytopoulos voted against the move and briefly voiced their opposition to it.

“I continue to be concerned that this reduction is premature,” Hytopoulos said.

“The responsible thing to do, because we are not in an urgent situation, is to complete the water study. Our ratepayers are paying, at most, median rates and will now pay very low rates for the region,” she said.

Hytopoulos said the council will likely be in a position to raise rates in the future because of the lack of preparation for the rate cut.

But Mayor Steve Bonkowski, who spearheaded the effort, maintained course and received enough support on the dais to get his rate cut. He said that he expects the council to change rates again in the future.

Bonkowski did not say, however, whether that change would be a raise or another cut.

“I believe that we are going to be changing the rates in the future,” Bonkowski said. “I think that is the whole reason of having a rate study and a water plan so we can put the two together at the same time.”

The city is expected to soon engage in a rate study for its utilities, and the study will contribute to its water plan update.

Bonkowski said that in 2011 when the council slashed water rates by 45 percent, there was also a discussion to refund a portion of money from the reserve account to customers, but that move couldn’t be completed with the water plan finished, and long-term needs had been established.

The reserve account was one reason council members voted for the rate cut this week.

“At the end of 2012 there was $566,000 added to our reserves,” said Councilwoman Debbi Lester. “Our reserves are nearly $6 million at this point.”

Lester added that the rate cut could be supported for several years, though it is not the council’s intention to maintain it for that long. Rather it will revisit rates after the rate study is finished.

But the lack of such evidence and studies for the 30-percent cut troubled others on the dais.

Councilman Bob Scales noted that previous rate cuts were backed by thorough discussions, a study and knowledge that the city’s rates were much higher than competitors.

“It was a successful process,” Scales said. “What we’ve had here is an abbreviated process. There hasn’t been much analysis and we are jumping the gun before we have a water plan. We don’t know what the long-term impact will be.”

Water utility bills will reflect the new rates beginning in the October and November billing cycle.

Fixed residential rates will likely drop from $7.67 to $5.37 for a multi-family dwelling, and from $15.39 to $10.77 for a single-family home with a 1-inch connection.

Residential consumption rates for the first 500 cubic feet would fall from $1.55 to $1.09 per 100 cubic feet.

That reduction trickles up the rate scale, all the way to consumption for more than 3,000 cubic feet, which would fall from $4.84 to $3.39 per 100 cubic feet.

Wednesday’s rate cut wasn’t the only utility business taken up by the council. Council members also approved a resolution effectively stating that all utilities would be run for the benefit of customers.

The resolution was altered from previous versions. Where it previously stated that utilities shall operate “for the benefit of their respective customers,” that language was modified after advice from the city attorney.

The approved version read: “The city’s water utility, sewer utility and storm and surface water utility are proprietary services. The funds from those utilities shall not be expended for general governmental services.”

The notion was generally accepted by all on the council, but it still stirred some debate on the dais.

“I don’t think this resolution is necessary,” Scales said. “It doesn’t do anything except restate what we are required to do by law.”

Hytopoulos echoed Scales’ sentiment.

“It has no meaning other than, in my opinion, to suggest that the city has not followed the law,” she said. “I am not comfortable with that position. I do not believe the city has not followed the law.”

Hytopoulos and Scales were in the minority, and the resolution passed with a 5-2 vote.