Last July the City of Winslow commissioned a study by Willdan Financial Services to determine the sustainability of Winslow’s utility rates. Dan Lanning, of Willdan said in that report, “In the future, you are going to need at least a five to six percent increase in your rates in order to keep up with costs as well as to get maintenance projects, upgrade projects and expansions.”
He explained that the first of the recommended increases would be reflected beginning this month. The increases are to help mitigate the debt accrued with the acceptance of a loan from the Water Infrastructure Finance Authority (WIFA) in the amount of $5.1 million to complete the wastewater improvement plan Phase Three. Phase Three includes the replacement of the Apache Avenue sewer line. The term of the loan is 20 years.
In last week’s Winslow City Council meeting, a motion was brought forth to adopt a resolution for a notice of intent to increase water and wastewater user charges. Councilwoman Judy Howell said, “I really feel like we need to look at something different than increasing the rates.” She expressed concern for the elderly population and others on a fixed income. “There are several people in town that are having to choose between paying their bills and eating. It is a real financial burden.’
Councilman Ricky Jackson said, “We have money in the account and I know that we have to have enough money for our utilities to function, but we have money. We answer to the citizens and this concerns me. I don’t think it should be the business of the city to make money on our water rates.”
Mayor Tom McCauley explained that the city’s financial situation has been stable. So stable, in fact, that “In fiscal year 2017-18, we only used 60 percent of our budget, both water and wastewater,” he said. “So 40 percent went back to our general fund that was not used. I feel like with our new water meters, we have inadvertently passed onto the consumer a rate increase. If you talk to people about their new water bills, since the new meters have been in, and you will find that their bills have all been increasing on a regular basis. I need to verify that through the finance department, but that is what the people are telling me.
“Of course, that is what happens when you install efficient meters. But that alone is a rate increase. We will see more revenue come into the city that we did not realize with the old meters. I think that we have room to kick back for a minute and take a hard look at our water rates. We have many here that cannot afford a higher water rate.”
City Manager Pauken responded by saying, “First, I would like to remind everyone that there is a program for water and wastewater customers at a certain level of income that get a reduction of 40 percent, or up to 40 percent of the standard rate. The reduced rate would go up to, but obviously not as much as, the standard rate.” The program is promoted through the finance department but Pauken admitted there are not many that take advantage of the program.
He continued, “We need to look at a whole year of the new meters before we get excited about how much extra money will be coming in. A lot of those meters went in during the heat of the summer, so we will see if they regulate through the winter months. The sewer, or wastewater rates, are predicated on your November, December and January usage rates, so it’s not likely to have a drastic impact on your new water rates as we adjust them.”
According to Pauken the study done by Willdan, “Gave us some guidance on what our rates should be.” He said, “We are trying to take the long view and anticipate capital improvements. There were a whole lot of years where there was no investment in our utilities and we are paying for that now.”
Following the discussion, Councilwoman Howell moved to table the motion, and said, “I would like to revisit this in three to six months.” A motion to table the resolution carried with a 4-3 vote, with McCauley and council members Howell, Jackson and Samantha Crisp voting in favor of tabling the item and council members Marshall Losey, Robin Boyd and Bob Shlesinger voting against.
The council unanimously approved another resolution authorizing the execution and delivery of the loan agreement with WIFA delegating the determination of certain matters to the city manager. Attached to the loan is a forgiveness clause in the amount of $510,000, which means the city will not have to pay back that amount. Phase Three of the wastewater improvement plan has begun and is expected to be completed within the year.
