PUD considers how to show tax increase

Wahkiakum PUD commissioners voted on Tuesday to add an informational line item regarding utility tax on invoices sent to Puget Island Water System ratepayers, but they held off adjusting fees to recoup the cost of a recent increase in the tax the utility pays to the town.

The Cathlamet Town Council passed a resolution in December to increase their utility tax from 3 to 6 percent, and the new tax rate went into effect for the billing cycle subsequent to February 18. The town supplies all water for the Puget Island Water System.

For residential customers with an average monthly consumption of 400 cubic feet the three percent tax comes to $0.21 per month, said PUD Auditor Erin Wilson via prepared report. With the new 6 percent rate, the surcharge would be 42 cents a month. Wilson based her figures on the current purchase rates established by the 2011 Town of Cathlamet Interlocal Agreement.

This adds up to over $4,000 a year in taxes, explained PUD Manager Dave Tramblie. He added that the 3 percent tax is factored into the cost per cubic foot currently charged to customers.

But nobody knows it, responded Commissioner Dennis Reid.

“Adding this as a line item would mean backing it out of the cost per cubic foot. It would be nice if our customers knew they were subsidizing the general fund of the town,” said Commissioner Bob Jungers.

PUD Attorney Tim Hanigan reminded the board that the current rate structure only accounts for the anticipated 3 percent tax, and thus the PUD is only collecting a portion of the tax it will owe the town.

The commissioners could elect to add a separate line item for the additional tax, offered Tramblie. The amount due would be calculated based on each customer’s consumption.

“I would hate to have another rate increase so soon after the last one,” stated Reid.

Hanigan clarified that collecting the additional 3 percent tax would not be an actual rate increase and would not require rate hearings.

“What I’m hearing is that you would like to see a notification on each bill each month that indicates what portion of the payment goes to the town, without adjusting the billing at all?” asked Tramblie, adding that would mean the budget would be about $2,500 over in expenses.

“So unless we increase the billing, that would come out of reserves this year,” said Reid.

The board approved Jungers’ motion to add an informational line to the invoices to the Puget Island water system ratepayers that indicates what portion of the cubic foot charge is paid to the town in the form of an excise tax, and said they would discuss the matter again.