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Water Rates Set To Take Big Jump

City of White Salmon to increase water rates for all customers.

A substantial increase in water rates is on tap for all customers served by the city of White Salmon.

Although the hike must still be ratified by the White Salmon City Council, a 3-2 vote by the city's Committee on Municipal Budget on Nov. 13 gave preliminary approval to a sharp jump in costs.

Under the "Option 2" plan agreed to by the Budget Committee, there will be an equal emphasis on impact fees and base rates. The breakdown in new charges is expected to go as follows:

Adopt a 150 percent increase in impact fees (residential hookups will increase from $1,500 to $3,750);

Adopt a $6 increase in base rates -- in addition to the already-planned $2 increase in 2002 for operations and maintenance;

Adopt a 30 percent increase in usage rates.

According to city officials, the added revenue is needed to cover interest payments and debt service resulting from the new $6 million water system built over the last several years. An additional $240,000 in annual revenue needs to be generated to meet costs.

The rate increases, expected to go into effect early in 2002, are in addition to a series of annual, phased-in rate hikes that were approved by the White Salmon City Council in late 1999. Those increases were designed to cover operations and maintenance costs over the next several years. For those living within the city limits, the phased-in approach served to bring the base water rate from $17 -- where it was in 1999 -- to $35 by 2005.

The new increase will be added on top of those.

"This is debt service to meet obligations," said Wil Keyser, director of the city's Public Works Department. "No matter how we generate it, Washington's RCWs prohibit system development charge funds to pay entirely for water development."

The committee had three primary options to choose from: Option 1, which focused on impact fees, would have led to a 200 percent increase in impact fees, a $5 increase in base rates, and a 25 percent in usage rates over the base water allowance.

Option 3 emphasized base rates, and would have meant a 100 percent increase in impact fees, a $7.50 increase in base rates, and a 25 percent increase in usage rates over the minimum.

"This is a lot of money for the size of water system we have," said Shirley Cox, vice-chair of the Budget Committee. "Committee members were very upset and concerned about affordability and livability issues."

Keyser told members of the Budget Committee that a decision was needed: "Do you want the bulk of the impact to be on ratepayers or developers -- or both?" Keyser said.

Keyser pointed out that there are many more ratepayers than there are developers.

"As new subdivisions come on line, my recommendation is we need a balancing act. Option 2 is probably the most fair, equitable, and defensible," Keyser explained.

Budget Committee member Mike Morneault questioned whether the city was getting these new costs because of excesses in the water system.

"Did we get a minimum system, or a gold-plated system," asked Morneault.

"You got a state of the art, 40-year system," responded Keyser.

"Could we afford a state of the art system?" Morneault shot back.

Cox pointed out that committee members are confused as to why the charges have come up.

"None of us understand," Cox said. "How did we get here, and why are we facing a $240,000 shortfall without knowing it was coming?"

Keyser said there were several reasons for the shortfall hitting the city at this time, but he put most of the blame on the city itself.

"How come this falls in our lap? Inept leadership, from political leaders and staff," Keyser said. "There was no capital improvement plan, it was all seat of the pants. White Salmon operated in medieval times because of that. But it doesn't do any good to blame anybody from the past. We can only change today and tomorrow."

Keyser added that state regulations were part of the cause as well.

"In the last three years, requirements have changed. We never knew about this until the last 12 months, or more appropriately, the last three months," he explained. "The amount of impact could not be foreseen."

City Council member Tim Stone said he believed it was unfair to charge more for water for existing customers, who have no choice in the matter.

"We have a captive audience," Stone explained. "The people here have no choice of accepting our rates or not if they want water. But someone coming in, they have a choice to accept our fees or go elsewhere. It's more equitable to give someone a choice rather than stick it to residents already here. Someone coming in to develop has a choice."

Dennis Fisher, a Budget Committee member, said he thought it would be unfair to lean more heavily on one side or the other.

"The best bet is to divide it evenly," said Fisher. "And Option 2 seems to spread it out most fairly."

Stone disagreed, however, saying that it would be more fair to raise impact fees by 200 percent.

"I disagree that a 200 percent increase in impact fees would negatively affect development," Stone said. "I think it's more humane to pass those costs on to those who can make those decision than have it crammed down the throats of current resident."

Stone added that another small increase could be made later if more revenue was still needed.

"Personally, I'd rather tick them off one time than two times," Fisher responded.

Cox agreed.

"If in June or July we have to raise rates again, it would be pretty hard to swallow," she said.

Cox added that she doesn't care for the choices.

"I don't like any of the options," Cox said. "But we were forced to do something."

White Salmon's water rates are already among the highest in the mid-Columbia Gorge region. However, Mayor Roger Holen said it was still a good deal.

"Expressed in percentages, I know it looks horrible," Holen said. "But for the average family of four, for $1.13 a day they can shower, rinse pasta, water their lawns, etc. It's the cheapest thing we do."

Fisher made a motion to accept Option 2, and it passed on a 3-2 vote with Tim Stone and Mike Morneault opposed and Dennis Fisher, Shirley Cox, and Ron Gookin in support.

The water rate increase will be on the City Council's agenda for Dec. 5.

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