No clear path for council action on sewer rates

Will they or won't they?

Members of the Cathlamet Town Council have been considering revisions to the structure of town sewer system rates for over a year, and on Monday, they received an analysis of sewer rates and finances from consultant RosAna Noval of the Rural Community Assistance Corporation.

Over the past few months, Noval has been using data from the town to develop spread sheets showing how different classes of customers would be affected under different rates.

The town is looking for a rate structure that will cover expenses and perhaps end some unfairness in the rates.

However, a two hour long discussion revealed no clear path to follow, and the council asked Noval to return after conducting a more detailed analysis.

Noval agreed and added that her work plan is quite busy for the next few months, so she won't be able to get to the project soon.

"You're in a good place financially," she said. "I'd look at this as a long term project."

The town's sewer funds need $288,000 per year to cover the costs of repaying loans to construct the new wastewater treatment plant and another $300,000 to cover costs of operation and to build a reserve. Rates are paid by 295 customer accounts inside the city limits and 113 outside of town.

In 2016, revenue to the sewer fund was insufficient, and the council enacted a hefty rate increase at the beginning of 2017, the first in 10 years, to address the shortfall. The council followed a recommendation from Noval to increase rates gradually each year to keep up with inflation and to avoid the need to make a big increase after going many years without an increase. A 2.9 percent increase is in effect for 2018.

The increases have stabilized sewer funding, Noval said, but over five years, inflation would add about $61,212 to the revenue requirement.

Under current rates, customers pay a set amount each month with variations for residential and commercial accounts inside and outside the city limits. This structure is easy to administer and understand and it doesn't require meters. Disadvantages are that rates aren't tied to use, there is no incentive to conserve, and there are inequalities.

Noval presented a variety of scenarios with rates based on water consumption, which can be used to predict sewage amounts. Each customer would be charged a set price per 1,000 cubic feet of water, and also a base rate to cover loan payment and other basic costs.

Raising or lowering the base rate or the volume rate creates a variety of impacts to customers. In one scenario, rates could go down for about half the customers, but they would almost triple for high consumption customers. Different adjustments could create the opposite effect, Noval said.

When considering setting any sewer rates, Noval strongly recommended at least a minimum of $288,000 for the base rate.

"Boosting the base rate yields rates close to what you have and boosts the small user rates," she commented.

Noval recommended the town conduct an educational program if it were to change rate structure, and perhaps it would be good to explain the current adjustments.