SEQUIM — First will come a refund, then a rate increase. Sequim residents saw a 3 percent tax on their water and sewer bills in February, but that was a mistake, City Manager Bill Elliott said.
“I assumed I could just show the B & O (business and occupation) tax on the bill like a sales tax and pass it through,” Elliott said Monday to the City Council.
“That is what we did on the city utility bills that went out the first of March.”
Adding the tax in that manner is against state law, Elliott later learned. The city must instead increase its revenue to cover the expense of the business and occupation tax.
“That means we increase the rates the same amount as the tax,” Elliott said.
When Sequim residents receive their bills on or near Saturday, they will see a small refund of the tax they paid on last month’s bill.
It will not be an April Fool’s Day prank.
Then water and sewer rates will go up next month, so bills sent in May will reflect the hike.
For households using 800 cubic feet of water or less, the base rate will be $17.45 per month, an increase of 43 cents.
The flat rate for sewer service will go from $33.62 to $34.46.
The city is implementing the rate increase to funnel revenue into its general fund, Elliott said.
“The city is paying itself,” he said.
Consumers can expect higher bills to arrive on or around May 1.