City delays rate hike decision

PRIEST RIVER — A decision whether to raise utility rates was delayed for a week after community members packed the room during Monday’s City Council meeting.

The proposed increases would raise the water rate by 4 percent, from $28.05 to $29.18. While the city was originally proposing an 8.2 percent increase to the $33.44 sewer bill, the most recent numbers show a proposed 6.3 percent increase of $2.11, for a total of $35.55. The utilities, along with bond repayments, currently total $100.60 for residents with no overages or discounts, so if the proposed increases are approved by council, the bill would go up to $105.54.

“This is just proposed,” said Mayor Jim Martin. “Does it mean that we are going to increase it? No ... When we do our proposed budget, we have to put it in at the maximum that we think we would pass — we can always go down; we can never go up.”

Martin said that, just as in people’s home lives, costs are going up for the city. Also, he said, the water and wastewater plant are regulated by the Department of Environmental Quality and the Environmental Protection Agency, which comes with a cost as well.

“Every time they have a new regulation that comes into play, we have to comply with it,” Martin said. “And that is very, very expensive.”

About a dozen residents came forward during Monday’s public hearing on the proposed increases with questions and concerns ranging from how the rate hikes negatively impact people living on fixed incomes, to why the city is proposing to increase the burden on residents while doing projects such as downtown revitalization.

Martin said the water and wastewater facilities have to run as separate businesses, so the city can’t legally take funds from the street budget to put toward the wastewater facility, for example. Also, the downtown revitalization was primarily funded through grants, which also could not be used for anything other than the designated project.

“(The water and wastewater facilities) have to completely operate on their own ... and they are all rate-based,” Martin said, adding that the city’s budget for the utilities is solely for maintenance and operations costs.

Some of the residents also asked why the city is proposing to increase the rates when they were recently raised by $7.88 between water and sewer. Council approved the rate increase a year ago, which went into effect Oct. 1, 2018 — the start of the city’s 2019 fiscal year, Martin said. Such would be the case for any rate increases that may occur this year. If council approves them next week, the rates would go into effect at the beginning of the 2020 fiscal year in October.

City resident Dottie Davis compared rates of Sandpoint, Kootenai, Rathdrum, Coeur d’Alene and other regional cities to Priest River. While some of the charges were lower, Martin said not only do some of those areas have a larger population to spread the burden, but the rates typically do not go up to 12,000 gallons before overage charges apply as Priest River does. Other had higher rates with less gallons allowed. Newport, for example, allows 10,000 gallons and their bill is $92, Martin said. In looking at the Sandpoint website, Martin said the base rate for water is slightly less than Priest River at $27.64, but only allows 3,000. So if a Sandpoint resident uses 10,000, he said, they would pay an additional $32.20. And sewer is based on the amount of water used by Sandpoint residents, he said, and averages $61.93.

Resident Robert Hipperson offered two “compromises” with council members in regards to the proposed increases. First, he asked if the city would consider upping the maximum 12,000 gallon usage seasonally for people to water their lawns without overages in summer months. Also, he said, with new developments coming in and being a “fairly large burden” on the system, the city should consider a development impact fee. “If the developer is going to make millions, then that developer can also help with the infrastructure and the development impact fee,” Hipperson said.

One of the most prominent questions by residents, however, was why Priest River has not gone to a usage-based fee system for water after replacing residents’ meters throughout the city for that purpose. Currently, residents are charged $28.05 for up to 12,000 gallons, and overage fees are applied if they exceed that amount. However, even those who use 3,000 gallons per month are being charged the same as those who use 11,999 gallons.

Sean Schneider, owner of the Eagle’s Nest Motel, said while he uses upwards of 9,000 gallons of water at his home, the motel is charged for 54,000 gallons, of which they only average about 4,000 per month.

“I am getting charged the residential one, plus $316 for my business when I use half the water that my personal house does,” he said.

Martin said businesses are charged on an industry standard of how much the type of business is capable of using.

The goal, Martin said, is still to go to a usage-based system in the near future. The biggest challenge, he said, is working out the logistics of how much to charge for a base, as well as the per gallon amount.

“We cannot operate those systems in the red, so we have to figure out, what is that dollar amount for that 1,000 gallons of water, or do we do it per hundred gallons — that is the next step in this process,” Martin said.

In answering a few other questions, Martin said there are 721 residential and 121 commercial active users on the city’s water and wastewater system, with an average of 9,861 gallons of water used per household.

Council members will revisit the proposed rate schedule for water and wastewater utilities during a special meeting at 5:30 p.m. next Monday at City Hall, 552 High St. The proposed 2020 budget of $6,534,371 was held over as well, since council members cannot approve it until they make a decision on the fees.

Mary Malone can be reached by email at mmalone@bonnercountydailybee.com and follow her on Twitter @MaryDailyBee.