Water and sewer rates in Hoquiam will raise 9.5% starting Jan. 1, and storm water rates 4.5%, as the city looks to maintain its systems during a time of increased operational expenses and flat revenues.
A single family home will see about a $3.58 increase in the fixed water service fee per month, said city Finance Director Corri Schmid. Sewer rates will climb by $4.01, again monthly and for a single family home.
Storm water rates will raise a bill by about 52 cents a month, because it, unlike water and sewer, had been operating in the red for years and only recently began to slip back into the black.
“In the past, storm water was able to help out our water and sewer fund, but lately even it started to decline and is starting to operate as a deficit as well,” said Schmid.
Rates will continue to rise annually through 2024, by the same percentages — 9.5% for water through 2023, 7.5% in 2024; 9.5% for sewer; and 4.5% for storm water.
A recent rate study said rate adjustments are necessary to fund annual operations and maintenance, taxes, and sewer system debt services. The amount of the increases were based on what that study found to be the amount needed to maintain the system over the next several years.
There will also be an increase in the usage fee. Water volume rates will rise annually starting Jan. 1 at the same 9.5%.
At a City Council earlier this week, the council unanimously approved the rate hikes, based on the rate study. There was a fair amount of discussion, mostly centering on reluctance to raise rates.
The rate study indicated the rate hike is also needed to transition the funding of yearly capital improvements to the systems to utility rates, away from the city’s watershed fund.
Ward 4 Councilman Greg Grun asked if funds from the city’s watershed from timber sales could be used to offset the need for rate hikes.
“At this point the watershed fund is covering all capital improvement projects in the water and sewer fund,” said City Administrator Brian Shay. “The rate increase is to cover the cost of operations.”
“Our watershed, it was subsidizing for the water, sewer and storm fund versus focusing on infrastructure improvements,” said Schmid. While there’s nothing in the city’s code that specifically says so, Schmid said the watershed funds are intended to pay for those infrastructure improvements, not subsidize operations, which are intended to be covered by rates.
Ward 2 Councilman Steven Puvogel said he had hoped the recent rate study would show that current rates were covering the cost of operation and maintenance of the systems, “but it turns out having a top-notch water, storm water and sewer system across a small city ends up being kind of pricey, and that we have been undercharging for what we have. It’s not easy to swallow,” he added, saying his own water bill causes him pause, but he would vote yes on the increases because the rate study showed they were necessary to maintain the systems.
The water, storm water and sewer rate increases were voted on separately, each one passing unanimously, with a few council members adding “reluctantly” to their yes votes.
New hookup charges
An ordinance to do away with the fees charged by the city for new development water and sewer hookups, known as capital facility charges, met with resistance at the council meeting, prompting a vote to table the decision to a later meeting.
Under the current system, capital facility charges are based on water meter size. A hookup for a 5/8-3/4-inch meter is $3,140, rising to $7,850 for a 1-inch meter, all the way up to $392,500 for a 10-inch meter.
Ward 6 Councilman Dave Hinchen drew on his own personal experience, saying it was the capital facility charge that prompted him to abandon the idea of building a new home in favor of purchasing an existing home.
“I was looking at building and getting ready to build, and one deterring factor was the capital facilities charge,” he said. When Grun asked if he would have been willing to pay a lower fee, “say $2,000 or $1,000,” Hinchen replied, “That would have been no problem. The hookup fee was $7,000.”
Ward 1 Councilman John Pellegrini noted the fees only apply to raw property, not existing homes.
Mayor Ben Winkelman was among those saying the high hookup fees were potentially turning away new development, including new, larger businesses.
“At least my perspective on it is it’s so much better to have a large utility user back on the rolls, if we had some of the big mills back, they used to pay a huge amount every month into maintaining our system,” said Winkelman. “That is the kind of overriding thing we need, to find some other industry to come in here so we’re not putting the burden on hardworking families and retired people.”
Schmid said the idea behind the fees was to take some of the burden off of existing customers who had been paying into the maintenance of the system for many years.
“Ours are a lot higher than the cities around us, and we probably get a new connection maybe once or twice a year, if that,” said Schmid. “So I think previously it was discussed, is it really worth charging the fees when the capital facility fees are so high? Is it pushing people toward not coming here?”
“When I was moving here from Florida I was a big supporter” of hookup fees, said Ward 2 Councilman Jim George. “But we’re not in Florida. We’re not Tampa. We don’t have 500 people wanting every single lot and bidding against each other. That’s not who we are, and having those kind of impact fees are not in our best interest.”
Other council members thought the fees could be lowered, not done away with. Ward 5 Councilwoman Denise Anderson was among those who did not think the fees should be completely eliminated.
The ordinance proposing to do away with the fees will now go to the city’s Utility Committee for further consideration. If the ordinance does eventually pass as currently drafted, the city will still charge its basic charges, including the cost of the meter, labor and materials, said Shay.