Thursday, March 28, 2024

City utility rates will increase over the next five years

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Starting in 2018, the utility rates in the city of Leavenworth will be rising over the next five years, mainly due to the multi-million dollar upgrade to the city’s wastewater plant. This upgrade was mandated by the state to reduce the amount of phosphorus deposited into the river by the plant. 

At the city council study session on Nov. 14, representatives from HDR, the company that did the utility rate study, presented a proposed utility rate structure over the next five years, but the rates sometimes spiked over the years. The city council asked if those rates could be flattened over time. 

“What the council had talked about was somewhere around 4 to 5 percent. HDR, Chantell (Steiner, city finance director) and city staff went back and took a look at some capital projects, some of the debt service and funding,” said Joel Walinski, city administrator, at the Nov. 28 city council meeting. “Our recommendation at this point in time, our rate increase in 2018 is 3.99 percent. Most are just under 4 percent. 3.85, 3.68. Keeping the rate right between 3.75 and 4. Is this where we want it to head?”

Mayor Cheri Kelley Farivar said the proposed rate increases were actually less than what the council suggested.  

“We said between 4 and 5 percent. They put it under 4 percent. It really is what the consensus of the group seemed to be at the time?,” Farivar said. 

Councilwoman Margaret Neighbors said she liked the year-to-year change. The increase can be seen better. 

“It’s still $40 over seven years. I like the less than 4 percent increase. I think that is a steady way to go,” said Councilwoman Mia Bretz. 

It prepares everyone for next year, Farivar said, no surprises. 

“What we’ll come back with, in the rate and fee schedule, we’ll want to be adopting a rate structure that covers the next four-to-five years. Then, we’ll put that rate in the rate and schedule,” Walinski said. 

Councilwoman Sharon Waters asked the rate increases would continue into 2025, 2026 and 2027. 

“We’ll have this in place for five years, 18,19,20, 21, 22. In 21, we’re going to do another rate study. Within five years, we’ll do another study. That will be factored into another rate study. We can see in the next five years, this is what is necessary,” Farivar said. 

Waters asked if the charges in 2023 and 2024 includes sewer plant upgrade. 

“To a degree. We will be paying off the debt on that, starting in probably 2020 and 2021. We’ll be making are first debt service payments. It’s included in these rates. If you do a rate study in 2022 and 2023, that debt service will be part of the conversation but the new expenditures will be also,” Walinski said. 

This is a pretty great picture for a big upgrade to our sewer system, Bretz said. 

“This is a projection. I think it needs to be said, things happen along the way. We can’t guarantee this rate through 2023, but we think this is a very logical projection we can promise,” Farivar said. 

There are a lot of pieces out there moving around, Walinski said. He noted the drought in California the past few years which resulted in some harsh utility rate structures on water. 

“If that happens here, this isn’t going to hold up. That is one thing. We look at our cash balances on an annual basis. If we see the cash balances have overestimated the revenue stream and there is a large amount of dollars in a fund balance, whether sewer or water, and that council wants to take action to flatten those rates. You have that opportunity,” Walinski said. “What we’re trying to do here is have a steady line across the way. What we heard from the council, let people know there is a gradual increase that is going to be underway. We don’t want any big spikes. We want solvent utilities.”

This projection also includes some upgrades to the water plant, said Councilman Elmer Larsen. 

“Normal maintenance has been deferred. They have a backwash basin that needs cleaned. Things that have been put off. If we get those things taken care, it reduces demand, unless something else pops up,” Larsen said. “Nobody likes to see the rates go up, but I would rather see a steady flow, rather than big jumps, which are dramatic for people.”

Ian Dunn can be reached at 548-5286 or editor@leavenworthecho.com.

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