SEQUIM –– Four percent annual increases to the city’s water and sewer rates over the next five years is the recommendation from a commissioned study of those rates presented to the City Council.
Goal of the increase is to provide enough revenue to pay for future capital improvements and maintain a cash reserve of $2 million in each fund.
“It’s a business. It’s its own enterprise that can’t be supported any way other than by the users of the system,” Public Works Director Paul Haines said.
“It’s an expensive enterprise to be in.”
A hearing to allow the public to comment on the study’s recommendations will be held during the council’s next meeting Tuesday.
The council received the 4 percent recommendation at a meeting Monday night.
Sequim’s $20 million water system currently serves the equivalent of 5,217 homes. The $38 million sewer system services the equivalent of 5,300 homes.
The city is expecting to make $11 million in improvements to the water system by 2032, when the growing water works are expected to serve 8,187 homes.
An additional $15 million worth of upgrades is planned for the sewer system in that same time, when it is expected to serve 9,874 users.
“That is a conservative look at what kind of revenue the water and sewer funds need, so we can then figure out how to come up with those revenues,” Haines said.
The 4 percent annual increase would ramp up the water bill for a single-family residence from $32.98 now to $40.13 in 2018.
Sewer bills would go from $55.34 now to $67.33 in 2018.
Currently, Sequim’s average water bill of $32.98 ranks lower than those in Port Angeles, $47.55, and the Clallam County Public Utility District, $57.90.
But Sequim’s average is higher than Port Townsend’s, which is $31.87.
Sequim’s average sewer bill of $55.34 is also lower than Port Angeles’, $63.10, and higher than Port Townsend’s, $33.85.
Rates are set by the City Council when it approves the city’s annual budget, a process that typically ends in December.
Under the existing rates, the study showed that the city’s water fund reserve would go from a 2013 starting balance of $5,035,000 to a negative balance of $4,760,400 at the end of 2018.
With a 4 percent annual increase in water rates, the balance would end 2018 with a surplus of $2,239,300.
The sewer fund reserve, under current rates, would fall from the 2013 starting balance of $4,794,000 to a negative balance of $6,690,300 at the end of 2018.
The 4 percent sewer increase would end 2018 with a balance of $2,115,600.
Sequim-Dungeness Valley Editor Joe Smillie can be reached at 360-681-2390, ext. 5052, or at jsmillie@peninsuladailynews.com.