By L. Parsons The Winslow City Council voted unanimously last week in the absence of Councilwoman Melissa Nelson to consider the possibility of adjusting water rates. In an informative presentation by Dan Johnson of Willdan Group, he explained the increases to the council. Willdan is an Anaheim, Calif., based group that provides professional financial consulting services to public and private utilities. Johnson’s report was an analysis of the city’s water and wastewater financial plan. “Managing a water and wastewater utility is very challenging these days because the cost of water continues to go up,” said Johnson. “At the same time, rate payers don’t want to pay any more. So if you’re going to raise the cost of something, there needs to be a good reason or explanation for it. While it’s admirable for a city to want to keep its rates as low as possible, you have to balance that desire with the necessity to have the financing and funds available to run your system at a level of service that is acceptable to your rate payers.” He went on to explain that many factors contribute to rate increases. “This rate study shows that average utility cost has been increasing five to six percent every year. The American Water Works Association expects water and sewer rates to triple in the next 15 years due to inflation, system replacement and maintenance. As costs go up, you have no choice but to pass those costs to your rate payers.” He continued, “I’ve worked with cities that have amazingly low rates, but the reason they have those low rates is because they are not putting any money into that system or hiring the right people. That’s not necessarily a better way of running things.” Winslow water and wastewater rates are comparable to surrounding cities and towns, according to Johnson. “Higher than some, lower than others but not out of proportion to what you are paying,” he said. “Your water and sewer funds are in good condition, financially you’re in sound condition. That is in large part because of some difficult decisions the city has made regarding past years’ budget and rate increases. However, the water and wastewater fund is starting to under recover. It’s kind of on the bubble. If you don’t continue to do modest rate adjustments, you run the risk of starting to have expenses exceed revenue in the water and sewer fund.” Winslow has mostly residential customers and the minimum charge for most of the residential customers is $13.93 a month. “The volumetric rate gets higher the more water you use. The idea behind this is to encourage conservation by saying there is a financial disincentive for using more. The average customer only uses 7,000 to 8,000 gallons of water a month and pays about $72 a month. That doesn’t include garbage or taxes, just water, which is lower than the state average. There are nonresidential and low income rates as well.” Because the water and wastewater utilities are city-owned in Winslow, they are not-for-profit revenue streams. As Johnson pointed out, they are meant to be self-sustaining. He continued, “For Winslow, the biggest impact on your rate plan is going to be the capital spending you do on your system. The amount of money you spend to repair and replace system assets. The capital projects that we are assuming as part of this plan are about $500,000 to $600,000 a year. For the most part we are asking you to put about a half million a year in to repairing, replacing and maintaining your system. The good thing is it is a direct investment in the future of the city of Winslow.” Based on the rate study and report, Johnson said, “What we would like to propose for the city to consider is the implementation of a five year water and waste water rate plan. It would be one ordinance, one public hearing, one vote and five years of automatic adjustments in January of 2022 and January of each of the next four years after that. That allows you to fund all the capital improvements and avoids any draw down of your unrestricted reserve balances.” According to Johnson, the water rate adjustment would be three to four percent per year and the waste water adjustment would be two to three percent per year. Johnson concluded with, “Adopting the resolution does not mean you’re raising rates it means you are considering the possibility of adjusting rates.”
