The current monthly average rate is $26.80 for a residential users; under the proposal being studied by the council, the average rate would jump to $48.45.
Low-income residents would continue to receive a 30-percent reduction in their rates.
The council discussed the issue earlier this month as part of a report presented by Courtney Black, project manager for FCS Group, which conducted a water rate study for the city.
When it comes to delivering water to its residents, the city is facing a variety of challenges, the council learned. Among them: Aging water pipes that needs replacing. Leaks in the water system and inadequate maintenance — due to lack of budget and employees — that don’t meet standards set by the Washington State Department of Health. Increasing costs of copper, concrete and asphalt.
“We have to be able do certain things to maintain our system at the requirement of the State Department of Health,” City Manager Scott Hugill said. “We need additional FTEs (full-time equivalent employees) to be able to meet that and to ensure the safety of our water distribution system.”
The city has just four employees to service more than 6,000 water service customers. “That’s pretty bare bones,” Hugill said. By comparison, the City of Monroe, with 7,000 customers, has 20 FTE employees, Public Works Director Eric LaFrance said.
Hugill also noted that other nearby jurisdictions are facing similar challenges and are also raising their water rates.
Mountlake Terrace will have a $600,000 budget deficiency in the water utility at the end of 2018, due to depleted budget reserves, the council was told.
“Based on the financial deficiency, the (state) auditors are going to have a finding that we are not covering our expenses for the utility so that will be a going concern,” Hugill told the council. “We’ll have a more difficult time borrowing (to fund capital improvements for the water system) and what we do borrow will be at much higher rates and costs.”
The water rate is based on a combination of providing the water service to residents and businesses, maintaining debt service for bonds to fund infrastructure improvements, and the capital costs. A total of 3.7 percent of the 2019 rate increase is related to an increase in the cost of water from the Alderwood Water District.
Under the proposal, lowest water users would pay less. The goal is to hold down costs for those who use less water — an annual average of 6 cubic feet bimonthly or less — while recovering costs from high users — between 10 cubic feet and 32 cubic feet bimonthly. A cubic foot of water is 7.48 gallons.
Councilmember Doug McCardle said he views the rate increase as important to securing the city’s future financial stability. “It’s hard to swallow, it’s going to be expensive and it’s going to probably create some uproar,” he said. “But I look at it, as a councilmember, I have an opportunity to ensure that the city has the dollars needed to take care of the future and get the infrastructure in a good state of repair now.”
Councilmember Bryan Wahl said it’s important to educate residents about the reasons behind the rate increase — “why are my costs doubling… when I’m not using any more (water).” Residents need to understand the consequences of not raising rates, and what affect that would have on the city’s service and infrastructure, he said.
“When we’re rolling this out, and they get this water bill, I don’t want it to be a surprise to them that their rate just doubled overnight,” Wahl said. “I want them to know why we’re having to do this and what the consequences are of not (doing it) — legal, health, fiscal and service.”
LaFrance said that without additional funding through a rate increase, the city is “going to be suffering more (pipe) breaks, due to a reduction in reliability.” As a example, he pointed to a break in an old cast iron pipe on 66th Street earlier that day, which disrupted water service for customers.
The Mountlake Terrace City Council is scheduled to have a public hearing on the proposed rate increase Dec. 3.
— By Teresa Wippel