What you pay for city water could double in the coming five years, if the City Council adopts the recommendations of a consultant. The last water rate hike was phased in over three years, 2011-2013.
In a report prepared for the city, consultant FCS Group is recommending a series of water rate increases over a five year period which would nearly double the base rate for water in Anacortes, bringing a so-called average monthly cost from about $17.00 to about $34.00.
The consultant’s report says, “Due to the magnitude and timing of needed capital projects, rate increases are unavoidable.” The report said the largest project is the renovation of a 3 million-gallon reservoir, costing $5 million from 2016-2018. The pipeline replacement program also needs over $1 million per year.”
Gordon Wilson, the project manager for the water rate study, told the City Council on Monday night that you can’t build capital projects without raising rates. “The City is entering a season of capital reinvestment in its water system, and the current level of rates is not sustainable.”
The rate study offers the city two alternative rate structures over the 2016-2021 period. One scenario, cited as Scenario A, would have gradual rate increases of 12 per cent per year each year, ending with a cumulative rate increase of 97 per cent. Scenario B would front-load rate increases with the cumulative increase of 99 per cent.
Scenario B proposes increases of: 36% in 2016; 18% in 2017; 7% in 2018 and 2019; and 4% in 2020 and 2021.
Wilson told the City Council that he recommends Scenario B for a number of reasons. Front-loading reduces the need to borrow quite as much money for the capital improvements and leads to less interest payments (debt service).
Wilson also said that rate payers generally get tired of double-digit increases year-after-year and would better tolerate a larger increase, followed by smaller increase over several years. He added that Anacortes has the second-lowest basic water rate among 112 cities surveyed in the state.
He said that even after increases in 2021, water rates here would be low.
City Public Works Director Fred Buckenmeyer said he wants to bring to the City Council legislation to implement Scenario B and he received a mixed reception.
Council member Ryan Walters said he doesn’t favor Scenario B and would rather institute tiered pricing where high consumption users pay more to incentivize conservation. He said he had studies water use and found that a small number of water users consumer far more water each month that the average user.
Brad Adams said he, too, wasn’t completely sold on “B” as it would hit low income pocketbooks harder. Liz Lovelett, meanwhile, said she agreed with Walters.
Council member Eric Johnson said he favors Scenario B, “We have a product that is underpriced.”
Buckenmeyer said he prepare for a City Council study session in the future to review options.