The increase for 2011 will generate about $250,000 in additional revenue for the city, helping repay debt and fund increased labor and operational costs.
The council will discuss the issue during its work session Thursday and provide direction to staffers. The 2012 rates will be a bridge until the city implements a five-year rate plan in 2013.
The council could decide not to increase water rates, a move that would force the city to dip into reserves. Woo said the water utility is one of the city’s most “financially challenged” funds.
The fund is on the hook for about $600,000 annually to repay a loan from the wastewater-construction fund to pay for the Hawks Prairie water-treatment plant. The fund will have to support some major capital improvements in the coming years, including ongoing water-line and valve replacement and projects tied to the city’s bid for water rights.
With those capital improvements looming, the city hired a consultant to develop a plan that would provide more predictability for rates, Woo said.
A final rate study is expected by early next year. Then the council will begin discussions to adopt a rate schedule prior to beginning work on the 2013 budget.
The city Finance Committee was briefed on water rate issues during its Sept. 26 meeting.
Council member Jeff Gadman, who sits on the committee, said that the council needs to look closely at the efficiency of operations before making a decision on rate increases, which he said should be a last resort. Last year’s vote to increase rates didn’t come without criticisms.
Then the council voted 5-2 to raise rates, with Andy Ryder and Cynthia Pratt voting no. Before the vote, Ryder stated that the city should have looked at other ways to reduce spending and that the increases were worst on businesses.
Council member Ron Lawson, who voted in favor of the increase, did so “begrudgingly,” saying that he wouldn’t vote to approve another rate increase until the economy improved.
His tune since has changed, with another year on the council and added knowledge of the city’s water issues sharpening his focus, he said in an interview Tuesday.
Lawson said an increase would be “unfortunate” but that he will take the issue seriously and will not look at it with a closed mind.
“I don’t know how much longer we can keep the same water rate and keep what we’re doing,” Lawson said.
Nate Hulings: 360-754-5476
nhulings@theolympian.com
www.theolympian.com/outsideoly
