Friday, March 29, 2024

Utility rates to rise, Larsen vehemently objects

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Councilman Elmer Larsen is by far the most senior member of the mostly new Leavenworth City Council. In some ways, the elder statesmen might represent the old way of doing things while the new council prefers a different direction. 

Case in point, Larsen expended a great amount of energy on Dec. 12 during the study session, public work committee and council meeting, arguing against the five year plan to increase utility rates, mostly because of multi-million dollar upgrade of wastewater plant. 

“We talked with the city council about, over time, accepting utility that are somewhat consistent over a four or five year period, so that people know what those rates are going to be. That is what that resolution is about. This gives us our game plan for the next five years on utility fees. The other resolution is the actual 2018 rate structure,” said City Administrator Joel Walinski, at the Dec. 12 study session. “This other is the 10,000 foot view. These are rates over fives, averaging 4 percent. It averages out at 3.75.”

Larsen said he has heartburn “like you wouldn’t believe” over this resolution. He said the city has never had a rate increase five years into the future. 

“We are obligating council members for five years. Oh, you might change it, but once we set, we’ll never back off. That’s my problem,” Larsen said. “I don’t like to go in with a 20 percent increase on something we have not even reviewed as a wish list. I see meters in here. I see 8-9 miles of pipe. We started with the rate hike because we needed it for the county plan. This has nothing to it.”

Larsen said this has never come before the public works group, in what he termed a “wish list.” He said he was not prepared to put “a nickel” toward water meters until the PUD resolves theirs. 

“We can say about lost water but we increased sales to 7,500 gallons (the base rate.) If we lose a few gallons, we’re not losing revenue because we’ve given them so much slack,” Larsen said. “I would approve a two year, 4 percent, 4 percent. That is 8 percent, but I’ll not commit to five years out. The public works doesn’t even know what is on that list.”

With the sewer plant coming coming in, Larsen said he appreciates the numbers coming up, but not 20 percent. He felt a 20 percent raise is unconscionable. 

“But it has been recommended. We have hired experts to come in and tell us, using these items, the sewer plant, the improvements to the water plant, the replacement of the meters and replacement of the pipe. They factored those things into these calculations,” said Mayor Cheri Kelley Farivar, in retort. “All of those had been factored there. They came back to us and said, in order to accomplish all of that, this is what we believe you need year over year to pay for those items. Those items have been factored in.”

That’s the problem, Larsen said. The council has never said it wants a rate increase to cover meters or replace nine miles of pipe. He felt it was a “wish list.” New councilman Clint Strand asked how big a piece of the increase is due to the upgrade on the wastewater plant. 

“That is a legitimate question, but to characterize the replacement of our pipe and replacement of our meters as a wish list is entirely inaccurate. We’ve been studying the meter replacement. We’ve had two full study sessions on the water meter replacement. We know how much it will cost us. We got a really good estimate. It’s not a wish list, it is a necessity in the same way as the sewer plant,” Farivar said. 

Walinski said about 75 percent of the increase is due to the sewer plant. 

“And a big factor from the water...we have no fund balance. Water is dire need of building itself a fund balance. That was part of the water one. When we roll over the year, we have $150 in our water fund. How do we expect to operate on a day-to-day basis and meet daily maintenance and operations?,” said Finance Director Chantell Steiner. 

Larsen said he had no problem committing for two years, then the council could decide to go for another two years. 

“To commit to a 20 percent increase today, that is five years. The cost of garbage could go up or the meters. On the meters, we’ve talked about it, but we’ve also said the PUD is going down that road with smart meters. Why would we get in front of them? We have nothing that says we have to have new meters. We have meters. The billing is going out,” Larsen said. “Everybody pays for 7,500 gallons of water and may us 5 gallons, if there is a little slop in the meters.”

Farivar asked if it was his recommendation the city not put in new water meters. She said she sure had the impression from the council the new meters were a really good idea. Larsen said that is reasonable but the city should not be paying for it today until the PUD decides what it is going to do with meters. 

“My understanding, from all the conversations we’ve had, going to this 3.75 percent over year, knowing we have pay for those big ticket items, was so we could level off the rate of change for the residents,” said Councilwoman Margaret Neighbors. “If the sewer treatment plant goes in 2020, we’re going to raise it 10-20 percent.”

Larsen said he understand that, but his point is that decision needs to be made two years out. 

“Maybe we say, we’re doing okay with water and garbage, so we only deal with upgrading the sewer plant. Or we say, we need it. But that decision shouldn’t be made today,” Larsen said. “What these numbers are based on is a wish list that I have not even seen and I’m on public works.”

Farivar said Larsen has seen the presentation on the water plant and the repairs necessary there. But that is not a 20 percent increase, Larsen said. 

“Your number of 20 percent is specious for this particular issue. You’re saying you have not been brought into the loop, but you’ve been present at every public works meeting where water meters have been discussed. Repairs to the water and sewer plant have been discussed. It’s not a wish list,” Farivar said. 

There has been no council decision on water meters or nine miles of water line, Larsen said. 

“We had a study session on these things and we asked for some direction on goals and preferences. That is the only time it has come before us. We have not talked about it in public works,” said Councilwoman Mia Bretz. “That’s why I was surprised to see this on the agenda for tonight. I don’t quite agree with Elmer’s sentiments entirely. I think it is a good idea to be proactive in this way and spread out the costs over time, but the plan is foggy for me as well.”

Larsen continued to press for two years, saying the city doesn’t even have a firm number on the sewer plant yet. He said the council has never committed five years ahead. 

Walinski said, it is true, the council has never done that. 

“When we started the discussion three months ago, we brought this discussion point up. Is the council interested in looking at a five, six, seven year plan forward. That is what this is,” Walinski said. 

Larsen said the city does not have a clue what the sewer plant will cost. Walinski said they do have a clue, $9.3 million. Larsen said it costs $5 million for the update the city has to do. 

“From RD (Rural Development) funding, we received $13.2 million. The cost of the sewer plant included is $9.3 million. The added cost to get to $13.2 million is for the infrastructure of the collection system. That is grant funding,” Walinski said. “The improvement for the waste treatment plant is $9.3 million.”

“The fact is the council agreed and endorsed the application for grant funding from Rural Development indicates that number of $9.3 million was cast in concrete at that particular time. You guys voted on that,” Farivar said. “Don’t say we don’t have a clue. We already have a grant in place that is based on actual engineering estimates for the sewer plant.”

I understand the need to do the sewer plant, Larsen said. 

“What I have a problem with is this council sitting here and passing an impact on rate payers for the next five years when so much is unknown. The meters are unnecessary at this point, in my opinion,” Larsen said. “I don’t know where you’re replacing pipes. Are we talking main line or on road projects or what? The problem is the council was not involved in setting the priorities for the guys that did the rate study. You told them we want this, want this, want this.”

Walinski said they provided HDR, the company that did the rate study, with copies of the water plan, facilities plan, sewer plan and transportation plan, all of which was approved by the council. 

“That’s where those projects came from. They did come back and say, are these truly what the council wants to do? We said, as far as know, they are included in the plans, so yes. But as being fixed in stone, that is not correct,” Walinski said. 

I just feel like we’re being steamrolled, Larsen said. Farivar asked, by whom is he being steamrolled? Larsen said by the staff, as the council has not participated in setting the priorities. Farivar said you have. Larsen said he doesn’t remember voting on it. 

“Of course, you did. We would never dream of spending that amount of money. First of all, we don’t have the authority to spend the city’s money in that amount without council approval,” Farivar said. 

Then, the council has never reviewed the project list associated, Larsen said. 

“I have to disagree. We did review this stuff. We’ve talked about it a lot over a couple years. My part of the confusion is not what are these things. We talked about it a lot. My question is more like when do want to see these coming up? That’s what I don’t know,” Bretz said. “All these projects, we’ve talked at length about what they are, how critical they are, how they need to come sooner than later and to have a five year plan that is this big of infrastructure changes makes a lot of sense. Two years doesn’t give you anything to really plan this out.”

Larsen said it would be prudent to look it two years down the road. The five year plan should be a guideline, not put in a document for the next five years. 

“Guess what? You can change your mind. If the council decides today to do 3.75 percent rate adjustment for five years and two years down the road, we decide we have more money in our account than we need, we can reduce it. It’s the prudent thing to do,” Farivar said. 

I don’t have a problem planning for five years, Larsen said. 

“I have a problem for us to invoke a rate increase that impacts five years out when we have not started on any of the projects. We don’t know what grant funding might be available for meters,” Larsen said. “We have meters that will function, if we have to go another 10 years. We can defer that. We do not have to approve a rate increase that impact five years down the road.”

The resolution sets the pathway, Walinski said. 

“On an annual basis, we’re going to plug in the numbers, based on the resolution. On an annual basis, the city council has to pass a rate and fee schedule,” Walinski said. 

Larsen continued to press his opinion for another 20 minutes, then further at the public works committee meeting, then finally at the city council meeting, to no avail. He even motioned to strike some of the language in the resolution related to five years, but his motion died for a lack of a second. 

Both the resolution and the 2018-2022 rate and fee schedule passed, with Larsen voting against each one. An interesting side note, the passing of the 2018 rate and fee schedule, because the vacation utility rate was not included, that basically cancelled the much debated vacation utility rate. 

Larsen proclaimed that will be revisited in the future. 

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

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