CRESWELL – The Water Rate Advisory Committee last week agreed it will recommend a 2% water rate increase and a 3% sewer rate increase to Creswell City Council for a vote. If approved, the total water charge would increase by $1 and the sewer charge would increase by $1.62.
The other options were to increase water by 3% or not increase it at all; however, Finance Director Jim Piper pointed out that there are projects down the line for the City, including arsenic removal infrastructure improvements at $415,000, and Water Master Plan priority distribution projects, including replacements of aging infrastructure and upsizing pipe for better fire flows, totaling $1.8 million and $3 million.
”It seems pretty reasonable,” committee member Steve Carmichael said about the increase.
Sewer funds are also being reserved for future costs such as the sewer plant upgrade, which has increased to $14 million. Some potential sources to help finance the plant include the $1.9 million in sewer reserves, finance options and debt service reduction, Piper said.
It is a ”pay now or pay later” scenario, Piper said, and this way the fund will have enough money in it when those projects arise in the next five to 10 years.
”A no-rate-increase is scary because it hits you down the road,” Piper said.
The committee also discussed making changes to the bulk water rate, which is available to people living outside the city limits. At this moment, there is no fee beyond the variable rate; however, Piper noted that with the rise in the number of people buying bulk water, the utility clerk spends more than half a day billing those customers, and those administrative costs aren’t captured in the variable rate.
Piper and Public Works Director Cliff Bellew suggested including a fee to help cover administrative costs. The committee overall agreed that the administrative costs should be covered, and wanted to see more numbers and fee options.
Looking back at past projections, Piper said that the City met their projections for water and one-time revenues. For Fiscal Year 2018-19, the committee hit their target of $375,000 in revenues over expenditures due to cost controls over materials and services, a 3% annual rate increase and the sale of old equipment.
Piper added that FY 2018-19 was the first time water rates have been below 1% of median household income since FY 2012-13, and they are in the ”sweet spot of affordability.”
Sewer revenue is easy to predict, Piper said, because there isn’t a seperate meter for outflow, so it’s based on the same usage. The fund met their $250,000 revenues over expenditures target for capital reserves by selling the vactor truck for additional revenues and sticking with a 3% annual rate increase.
Residential users are still in the majority in Creswell, with 93% using City water, and three-quarter-inch meter pipes are the most common. The methodology the committee uses is called a potential demand base, which is based on the pipe meter size and its flow capacity. Residential users commonly choose the smallest meter pipes, but larger meters are available for a business with a higher flow capacity; those users are also apportioned a larger share of the system’s fixed costs. Due to Creswell having low commercial and industrial use, the rates are similar to a flat rate.
The committee will meet on Feb. 13 to discuss and recommend a fee addition to the bulk water base rate.
