Council approves sewer rate hike

Audrey Caro

After much discussion, the Sweet Home City Council on Oct. 24 approved an increase in wastewater rates beginning Nov. 18 in a 3-2 vote.

Based on an average of wastewater usage, that could mean a $17 increase for anyone whose monthly usage exceeds 300 cubic feet.

Councilors Susan Coleman and Diane Gerson, and newly appointed council member Robert Briana, voted for a resolution establishing the new sewer rates; Mayor Greg Mahler and Councilor James Goble voted against it. Council members Lisa Gourley and Dave Trask were absent.

City Manager Ray Towry started the meeting off with a presentation on municipal finance.

The water and wastewater fund is an enterprise fund, he said. Enterprise funds are supposed to be self-sufficient.

Money from an enterprise fund cannot be used to pay for something else, he said. The city cannot, for example, raise water rates to pay for parks.

“Council has done a phenomenal job of keeping the wastewater treatment rates as low as possible particularly through the recession as people were struggling,” Towry said. “We kept as much money as we could in people’s pockets.”

City wastewater charges include a base rate, which is the same for all metered consumers, as well as a commodity rate. The commodity rate measures water in cubic feet; 100 cubic feet is roughly 748 gallons.

The current base rate is $40.87, which includes use of 400 cubic feet of wastewater. Beyond that 400 cubic feet, consumers pay a commodity rate of $6.12 per 100 cubic feet.

According to Towry’s presentation, in 2010 the city’s residential sewer base rate was $26.89, an increase of 17 cents from the previous year; the commodity rate was $5.82, a reduction of 38 cents.

In 2014 the base rate was $36.70, an increase of $8.70 from the previous year and the commodity rate was $6.45, a reduction of $1.21.

In 2016, the base rate rose to $40.87, an increase of $4.17 from the previous year and the commodity rate was $6.12 a reduction of 33 cents.

As the city spent money on the wastewater system without raising the rates, the ending fund balance declined, he said.

The wastewater fund currently is currently about $33,000 in the red, he said.

“This violates that tenet of an enterprise fund,” Towry said.

To cover wastewater costs, the city has taken money out of the general fund and special revenue funds, he said.

It’s robbing Peter to pay Paul, he added.

Towry said he thought the council lowering rates at different times was positive for the community.

“I think that’s something the citizens need to recognize, how hard we’ve worked to both address issues that we were required to address by the state and at the same time help our community get through the recession,” he said. “The problem is, though, that we’ve kicked this can down the road.”

Sweet Home’s 70-year-old wastewater treatment plant, despite upgrades in 1974 and 1994, is outdated and continues to, on occasion, leave the city out of compliance with Department of Environmental Quality regulations.

The city is in the planning stages of replacing it and needs to raise rates to get the wastewater fund in the black and support the wastewater treatment plant project.

City staff compiled several different options of raising rates for councilors to consider at the Oct. 24 meeting. Each option in the base rate and commodity charges included variables, which are dependent on usage.

Towry said increasing the rates will be necessary to “stop the bleeding” so the city could pay itself back. The council will review rates every spring, he said, adding that they cannot continue to lower rates.

Briana said he didn’t think most residents, including himself, knew that rates had been lowered previous years.

“One of our council goals is for the infrastructure,” Goble said.

“On the flip side, past practices got us in this situation. I don’t think we should be too greedy off the bat to pull this from our community. I do agree that we need to front-load this as much as we can, but they’re going to want the biggest bang for the lowest cost and I’m right there with them.”

As the councilors discussed the different options, each expressed concerns about the short-term and long-term impacts on consumers.

“I believe our philosophy is the greatest good for the greatest number of people for the longest period of time,” Gerson said. “So the longer we put this off, the harder it’s going to be.”

She was in favor of a more aggressive option than the one she eventually voted in favor of, though she acknowledged her own bill would be higher.

She said one of her concerns was that if councilors did not raise the rate enough to bring the wastewater fund into the black, they would have to raise rates again in the spring.

“If we can raise it now to where we’re satisfied with it, we can review it in the spring but we don’t have to do anything to it,” Gerson said.

Mahler said they needed to make a decision that night or at the next City Council meeting.

Briana expressed concern that two councilors, Gourley and Trask, were not at the meeting to vote.

The option that was approved keeps the base rate the same, $40.87, and increases the commodity rate from $6.12 to $9.78. Previously 400 cubic feet of wastewater were included with the base rate. That was changed to 300 cubic feet.

“I would hope next time we wait until we have a full council,” Gerson said. “I think it’s important.”

“At the same time, putting it off would be difficult on the community,” Coleman responded.

In a conversation after the meeting, Towry said he was concerned that residents know that the split vote was not about raising wastewater rates, but rather how to raise the rates.

“The rates had to be increased,” said Mahler, who voted against the option that was passed. “I felt that it needed to be slow, incremental. I thought we were a little too aggressive, but that was why it was split.”

Towry said he knows people are going to be upset.

“I’d invite any of them to come in,” he said. “I’ll show them where we’re at and what we’ve got. We’re happy to talk them through it.”

City staff has been working with CH2M Hill to arrange public tours so the public can “see what we’re dealing with,” he said.

“We can set dates,” Towry said. “(Members of the public) just need to call us and we can set a date and a time and you can see how old the equipment is.”

Wastewater plant project update

Towry said the wastewater treatment plant project will cost less than expected.

“The good news is we have a glimmer of hope,” Towry said. “(The wastewater treatment plant project) is not going to be $40 million. We’ve gone through and looked just a little bit more in depth. We’ll be able to trim that down pretty significantly.”

Public Works Director Greg Springman said city staff looked at condensing the major components of the project rather than working on it in phases.

“If we were to do the whole project at once, it would be about $25 million, deducting the wet weather project and the wet weather disinfection facility, which would be done in 2035,” he said.

There also is savings associated with not having to design each individual phase.

“Altogether we can roughly knock $18 million off this project,” Springman said. “That’s still a conservative number, just because we haven’t gone to design yet.”

To arrange a tour of the wastewater plant, call the city manager’s office at (541) 367-8969.