Rates for water, storm drainage service to increase

When Auburn residents open their mail next month, they will learn they’re about to pay more for water and storm drainage.

By Robert Whale • October 14, 2008 2:05 pm

When Auburn residents open their mail next month, they will learn they’re about to pay more for water and storm drainage.

For the average single-family residential customer, the increase amounts to $3 month on the $70 they are now paying for water and storm drainage, a 9.73 percent increase.

City Councilman Rich Wagner, chair of the Public Works Committee, explained why the rate increase, which City Council approved Oct. 6, is necessary.

“There’s an accounting principle that says you have to have a revenue stream 1.25 times what you are bonded, and every year it has to justify that,” said Wagner. “This is the first year where we have been doing a bunch of projects where we haven’t been quite at that level. We were like 1.2 or something like that.”

These increases will put the water and storm utilities in line with costs already in place for sewer. Costs will go up 6.06 percent in January of 2009 and 5.99 percent in January 2010.

“We are also doing a rate study that will come out next spring,” Wagner said. “We can’t yet project what the rate changes might be then, but they certainly won’t go down. We thought we might as well put in 6 percent for next year, guessing that that’s probably what the rate study is going tell us. So it goes into effect Jan. 1, even though we won’t do the rate study until March,” Wagner said.

Wagner said several factors contributed to the decrease in revenues, the largest being the loss of revenue from the annexation areas of Lea Hill and West Hill that became effective Jan. 1, 2008. Following the annexations, 4,100 households in those areas were no longer paying the outside city surcharge of 50 percent for water and sewer services. When that happened, revenues took an estimated $850,000 hit.

Wagner also mentioned costs associated with existing labor contracts, increases in employer medical and pension contributions and inflation.

“Things just wear out and we need to build more stuff,” Wagner said. “Most of the actual capital that goes toward building things like pump stations and pipes are paid for by the developer. As soon as they come on line, however, we have to maintain them and replace them when they wear out,” Wagner said.

Enterprise funds such as utilities do not use taxes, Wagner added, they have to pay for their own operations.

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RATES AT A GLANCE

Average single family residential monthly utility bills: a comparison.

Current utility rates:

Water 19.60

Sewer 10.39 (city portion)

Sewer 27.95 (King County portion)

Storm 11.50

Total 69.44

Rates with the utility rate increases voted by the Council Oct. 6, 2008:

Water 21.51