The City Council is talking about water and sewer rates again, and it’s not going to be pleasant.
We’re not necessarily talking about the tenor of the discussion. But what it does mean, for all of us, is a rate increase will be the result. Anything else would probably be foolish.
Doing it the right way could be even more painful for many local citizens, who would have to stop receiving a subsidy from higher-consumption water users.
As we report beginning on page 1, the council spent a work session last week talking mostly about the 400 cubic feet each water customer receives each month by simply paying the base price for water and sewer service.
The cost of that subsidy, received by nearly every water customer in the city, is borne by those who use more than 700 cubic feet, in the form of a higher cost per 100 cubic feet of water.
The subsidy decreases incrementally above 400 cubic feet of use and disappears at about 700 cubic feet.
‘This is a tough issue, because we’re talking about a basic necessity –water. This isn’t taxing people, who work 60 hours a week, to fund programs to provide cell phones or some other convenience to those who don’t work at all.
There are a lot of moving parts in this discussion.
Though we agree with Councilor Jeff Goodwin that trimming back, if not eliminating, the subsidy would put the rate structure on a sounder footing, we’re not sure about his assumption that demand for city water is very elastic, meaning that the lower the price goes, the more people will use a good or service.
As some other councilors pointed out in that discussion, most of us already use as much water as we’re going to. If we don’t already water our grass, we’re probably not going to start – particularly if we don’t enjoy mowing on hot summer days. We likely won’t take too many extra showers or do extra laundry because the water’s cheaper.
We just don’t think water is a highly elastic “good,” though a change in the rate structure may have some impact on demand. Some users, who find themselves unable to afford summer watering now, may likely do so.
The subsidy arrangement was originally intended to help poor, low-income users and seniors on a fixed income.
Goodwin correctly pointed out that low consumption does not necessarily mean a customer’s income is low.
As Trask noted in the discussion, though he’s on a fixed income, he’s hardly poor. He’s retired from a union job with CenturyLink.
Those who have benefited from that subsidy and who use low amounts of water, though, can take heart. As of last week, four of the seven councilors opposed removing the subsidy at this point.
Councilor Ryan Underwood opposes removing the subsidy, even though, as a high-capacity user, he would stand to gain a lot from forcing all users to pay their fair share.
But he’s concerned about raising rates on so many people in Sweet Home. His opinion stands on a principle he believes is important, even when it is opposite of his own personal best interest, which is commendable.
And that’s the best thing about the work session on rates on Feb. 24. This council had an excellent discussion that highlighted the tensions involved with water and sewer rates. It’s not an easy issue. Those who support the subsidy believe they’re helping the poor and shielding the majority of water consumers from huge rate increases.
Council members appear to clearly understand all of the tensions surrounding this issue, and we applaud them for debating the pros and cons in a mostly coherent and healthy way.
So, having said all that, we really like the compromise Goodwin floated at the last minute during last week’s meeting to ease the city out of this rate structure: that the subsidy be reduced to 300 cubic feet per month for the 2016-17 fiscal year and then cut further at a later time.
That’s a great idea. It addresses the concern over slapping low-capacity users with significant rate increases, but also allows for a general rate increase to cover rising costs.
We will still deal with high water bills, which don’t seem right until customers understand that we’re paying off debts from pipe replacement, improvements at the sewer plant and a new water plant – all results of what can only be described as poor planning in the past.
Maybe Goodwin will turn out to be right about the elasticity of demand for water. Empirical data will support his claims or it won’t, although other factors could confuse what we’re seeing; but it could mean our City Council will be able to think about decreasing rates next year.
The 300 cubic foot compromise gives us a chance to see if Goodwin is right about our community’s needs for water while protecting the interests other councilors are concerned about.