PORT ANGELES — The Port Angeles City Council is considering raising utility rates in the coming year.
The current water, wastewater, and medic 1 utility rates will expire at the end of the year. Staff recommendations were presented at a public hearing on Oct. 4 and will continue on Tuesday.
Deputy Mayor Brendan Meyer moved on Oct. 4 to strike Tuesday’s public hearing, saying he opposes raising rates.
“I can’t accept a rate increase at this time,” Meyer said.
“I move to instruct staff to apply a mix of ARPA (American Rescue Plan Act) funds to address budgetary shortfalls in utilities and delay raising utility rates due to the economic impact of COVID-19 and the rate of inflation and waive the second public hearing,” he continued.
Meyer’s motion died without a second.
Other council members saw raising costs as a necessary evil.
“I know this is a tough pill to swallow,” Council member Mike French said. “We’re coming down that mountain of debt at the same time we’re trying not to kick the can down the road and take seriously our responsibility to maintain our utilities for future generations.”
Staff members presented multiple scenarios for the council to consider in light of inflation, personnel costs, and increased capacity needs to complete necessary infrastructure projects and tasks.
“Staff is committed to ensuring utility rates remain affordable, especially considering the impact of high inflation and current economic trends,” said Sarina Carrizosa, city finance director.
The staff-recommended scenario includes using funds from the National Park Service fund to keep the rate hike lower, a measure described as stabilizing rates.
“The National Park Service funding is from 2006 and 2008 and staff is recommending the use of about $200,000, which we have done in the past to help stabilize utility rates,” Carrizosa said.
”That funding has very specific uses tied to it when we received it. It can only be used for capital or rate stabilization, which is why it has kind of been sitting there because there has to be an approved use for that by the council.”
Carizosa described the rate stabilization process as one by which the city works through its Cost of Service Analysis to determine how much revenue is needed for the coming years to offset expenditures.
Providing an example of the city needing $500,000 to meet revenue expectations for expenditures, but not wanting to raise rates by 10 percent, in an effort to control that, the city could use money in a reserve and instead of raising the rate to collect that $500,00 raising the rate to collect $300,00, Carrizosa said.
Staff is recommending rate stabilization for water and medic 1 utilities and capacity increases for water and wastewater utilities.
Carrizosa explained that the capacity increase is a built-in amount of money in expenses for each of the utilities, in this case about $140,000 put into water and wastewater.
“We built into the rate an additional $140,000 in expenses for each of those utilities and that directly goes back to projects and tasks that need to go forward and we need funding to be able to do them. When we talk about capacity it is this broad how do we accomplish the tasks that we need to,” Carrizoasa said.
The current medic 1 residential rate is $111.48 per year and is projected to go up to $156.86 per year, a $45.38 increase without stabilization; with stabilization, the rate would rise to $148.45, a nearly $37 increase.
Commercial rates for medic 1 are $117.53 per year and are projected to increase to $158.69 per year, a $41.16 increase without stabilization; with stabilization, the rate would go up to $150.16 per year, a $32.63 increase.
Medic 1 is an emergency transportation utility.
“Though rate increases are projected for the coming year, rate stabilization will assist city residents and customers and allow the utilities to remain solvent and address future infrastructure needs,” Carrizosa said.
The current residential water base rate is $38.50 per month, with consumption charges that range from $4.94 to $14.82 for low consumption, $23.51 for medium consumption, and $1,193.23 for high usage for total monthly bills of $43.44 to $1,231.73 depending on the size of the water meter.
Eighty-eight percent of water and wastewater customers are residential customers with water meters in the 500- 1,150 cubic feet range, placing most customers in the low to medium-consumption category, the staff said.
Water cost without any capacity increase would be a base rate increase to $41.19, with consumption charges ranging from $6.24 to $18.71 for low consumption, $29.68 for medium, and $1,243.88 for high usage for total monthly bills of $47.43 to $1,285.07.
Water rates with capacity increase and stabilization would be a base rate of $40.86 with consumption charges ranging from $6.30 to $18.90 for low consumption, $29.98 for medium, and $1,246.42 for high for total monthly bills ranging from $47.16 to $1,287.27
Current Wastewater rates are $47.26 monthly base rates with consumption charges ranging from $14.47 to $43.40 doe low consumption, $66.54 for medium, and $433.95 high, for total monthly bills of $61.73-$481.21.
Rates with a capacity increase would be a base rate increase of 48.88 with consumption charges ranging from $16.13- $48.38 for low consumption, $ 74.18 for medium, and $483.75 for high for total monthly bills of $65.00-$532.75.
“This is the option staff is recommending because we feel that it provides the best balance between affordability and the needs within these utilities,” Carrizosa said.
Reporter Ken Park can be reached by email at firstname.lastname@example.org.