Waitsburg Council Plans Utility Rate Increases

WAITSBURG – Waitsburg residents will notice a slight increase in their utility bill in the near future, but the exact amount of the increase is still up in the air.

Facing concerns over needed repairs to aging infrastructure, the Waitsburg City Council agreed to consider a five percent increase in water and sewer rates at their Jan. 11 council meeting.

However, a suggested decrease in the monthly water allotment from 1000 cubic feet to 500 cubic feet, combined with a reduction in overage charges from 80 cents to 65 cents, makes it difficult to determine just what effect the changes will have on the city budget.

“I am still working on the number to see if we (the city) are better off or not, so final approval might be slightly different,” said City Administrator Randy Hinchliffe, after the meeting.

Hinchilffe approached the council last October and suggested that they consider revising the current utility rate structure to prepare for anticipated infrastructure issues.

Hinchliffe told the council that thousands of feet of crumbling terracotta sewer line needs to be either replaced or relined, leaks in the watershed need to be repaired, and new state regulations will require the city to replace its 600 water meters, which contain lead.

Hinchliffe said that raising utility rates in order to put aside funds for capital improvements and repairs is inevitable, and that it is just a matter of how the city wants to structure the increase.

Currently, users pay a base rate of $33.90 for 1,000 cubic feet of water and pay 80 cents per 100 cubic feet of water used over the base. They pay $42.75 for sewer.

Hinchliffe suggested doing away with the base rate and charging users for only what they use, at 80 cents per 100 cubic feet. He estimated the change would amount to an $8 increase for most users. He said the average consumer uses 2,000 cubic feet of water each month.

Each year the city has the option to take a Consumer Price Index (CPI) increase, but has opted not to most years. In a January memo to the council, Hinchliffe analyzed how taking those increases would have affected utility rates.

Had the increase been taken annually since 2005, rates would have been $35.36 for water and $49.87 for sewer for a total increase of $18.88. Instead, rates have increased by $10.30 over the same timeframe, leaving a gap of $8.58.

“This has resulted in a loss of revenue of approximately $173,000, over the past 11 years. The gap would have been higher had we not raised rates to cover the debt service to fix the leaking waterline on Main Street, which added $6.00 to the water rate,” Hinchliffe told the council.

Hinchliffe said that automatically taking the current CPI increase, which is slightly over one percent, would mean an increase of 35 cents for water and 43 cents for sewer, for a total increase of 78 cents per user, per month. He again recommended eliminating the base allotment and having people pay for only what they use.

He said a recommended $12 increase in water and sewer rates could be leveraged and used toward infrastructure financing, which would be enough to fund $1.5 million in improvements over a 20-year payback period.

“That would take care of a lot of deficiencies in our systems,” he said. “Any increase below the recommended amount would result in a reduction in the capacity to fund infrastructure improvement over time and could actually end up costing more, should a mainline or other facility component fail,” he added.

Waitsburg isn’t alone in facing infrastructure challenges. Last month, Dayton raised their residential base utility rate from $83.75 to $89.40 to help the city purchase land for a new wastewater treatment plant.

After discussion, the council agreed that they would prefer to take smaller increases over several years, rather than saddling residents with such a large increase all at once.

The council agreed to consider a five percent water and sewer increase, but also opted to lower the monthly allotment from 1,000 cubic feet to 500 cubic feet and change the overage charge from 80 cents to 65 cents. Hinchliffe will work the numbers and bring the results to the February council meeting for further discussion and possible approval.