City council raises rates

Stanwood City Council voted four to three last Monday to raise water and sewer rates by 8 percent and 5.5 percent, respectively.

Council members Andy Chapel, Bill Carlton and Shelley Klasse voted against the increase. Mayor Dianne White was excused from the meeting.

The ordinance represents a combined increase of $3.34 per month for residents, and $194,900 revenue for the city.

As indicated by the narrow passing margin, it was not an easy decision for council, despite the gain already being factored into the 2010 budget.

However, council, and Crystil Robinson, finance director for the city, made clear that rate increases were not being proposed to buoy the general fund.

The rate increases are necessary to maintain the current level of service through the Capital Improvement Plan, said Robinson.

“Water and sewer are separate from the general fund,” said Klasse. “They pay for themselves.”

Maintaining this level of service includes financing future projects as well as paying debt service on projects completed in the past.

“If we don’t raise rates, projects we have planned for the next six years will have to be put on hold,” said Robinson.

Andy Bullington, public works director, also pointed out the $7 million the city spent on water and sewer plant improvements, which needs to be paid back.

“(The rate increases) are about maintaining infrastructure,” Bullington added.

Councilmember Leonard Kelley agreed.

“If we don’t have a sound infrastructure for water and sewer, we won’t have the foundation for growth,” Kelley said.

In regards to growth, council also passed Ordinance 1260 by a five to two vote. Council members Arne Wennerberg and Timothy Loney voted against the ordinance, which raised the water, sewer and drainage plant investment fees. The investment fees represent the one-time cost of connecting to the city’s infrastructure. They are determined by a formula that takes into account growth, maintenance and several other factors, said Robinson.

In 2010, connections, which are included in the price of permits, will cost an additional $922 for water, $2,548 for sewer and $65 for drainage.

The revenue from these increases will fund the same Capital Improvement Plan as rate increases, and ensure the burden of paying for current and future service is spread among current and future ratepayers. The city expects 10 new homes to be built in 2010.

Council was hesitant to vote in the increases, especially during this economy. In the end, though, putting them off would cost residents more later.

“Postponing rate increases means larger future increases in order to catch up,” said Loney.

No matter what, the current level of infrastructure has to be maintained, many agreed.

“It’s the bottom line,” said Kelley. “If we don’t do it now, it will cost more down the road.”

Rate increases to water and sewer, and the increased connection fees, were as far as council was willing to go. They tabled a third proposed increase for cable TV utility tax. This would have increased the tax from 3 percent to 6 percent (the minimum rate for other utilities), and gained $30,900 in revenue for the city.

Council unanimously decided to bring the ordinance back for a second reading on Dec. 10.

The cable TV utility tax is collected in addition to a 5 percent franchise fee. This means the total fees collected on cable TV are currently 8 percent – an increase would raise it to 11 percent.

“There was a reason it wasn’t at 6 percent before,” said Klasse, “and that was because of the franchise fee.”

Loney worried that the increase was reactionary. He wondered if the increase was being proposed because of budget concerns, or “if it’s good policy.”

Kelley didn’t feel it was reactionary.

“This was brought up a year ago, and we put it off because of (the poor economy),” he said. “It has nothing to do with budget.”

Even so, enough concern was raised about the increase that it was put off again.

A second reading will take place Dec. 10, along with a second reading and adoption of the proposed 2010 budget, at 7 p.m., in the school district’s administration building, 26920 Pioneer Hwy, Stanwood.

In other city council news:

Council unanimously voted in favor of amending the 2009 budget, as follows:

• City received an invoice for a project completed in 2008 in the amount of $9,700. Requested a budget amendment in the amount of $10,000 to cover invoice and any other unforeseen fees.

• Professional services, in the amount of $1,212.25 year to date, have been to Bank of New York with approximately $250 more to be invoiced. Requested a budget amendment in the amount of $1,800.

• $500,000 was budgeted from sewer operating fund to cover a bio-solids removal project. Further discussion found this expense to be related to sewer construction, not operating. Requested a budget amendment to transfer $500,000 from sewer operating fund to sewer construction fund; $81,100 was not invoiced in time to be billed in 2009. These monies will be added to beginning cash balance for the 2010 sewer construction fund, to be paid when invoiced.