1981 07 21 SS3162A
CITY COUNCIL STUDY SESSION
Water and Sewer Rates
July 24 1981
Joseph K.Gavinski,City Manager,presented a letter form Seattle Northwest Secur
ities,the city's bonding counsel,which states that the city's water and sewer /£Q-
fund must be equal to 1.35 times the debt service.He stated that the city will
have to raise an additional $225,000 in 1981 in order to meet current bond require
ments.He stated that the city currently has two ULID's which the city is trying
to sell bonds for.
Mr.Gavinski stated that in 1980 the State Auditor indicated that the city had just
missed meeting its bonding requirements.However the amount was small and so an
-'exception was not written as there was some indication that the rates were going to
be reviewed and the situation corrected.Mr.Gavinski stated that the city has
been using the reserves to fund not only maintenance and operation but capital
construction.
Mr.Shinn stated that the city will lose $217,000 in 1981 if the current water and
sewer rates are maintained.In 1980 the city lost $102,000.
Robert Townsend,Public Works Director,presented the proposed capital improvement
program for the water and sewer system.
Mr.Gavinski stated that it may be permissible to go to a bond issue but the bonds
may not be marketable.The city could raise about $4.6 million if it had to.If a
bond issue were comtemplated for this fall,the information would have to be given
to the auditor no later than September 19,1981.
Mr.Gavinski stated that the city cannot bond any more unless revenue is increased.
Mr.Hill stated that Mr.Townsend has suggested a minimum water charge of $7 and
$0.35 per 100 cubic feet after 500 cubic feet.He felt that $6.60 was too much for
the first 500 cubic feet of water.
j J There was some discussion by the Council on the different rates and the amount of
| I revenue that would be generated.
It was the consensus of Council that the Finance Director look into the revenue
that would be generated by the various rate charges.
There was some discussion on the additional charge of $2.75 for the new waste water
treatment facility.Mr.Townsend gave the Council some background on the new sewer
treatment facility and stated that the construction would cost approximately $10
million.Funding will be probably be available,either state or federal,on a 50%
or 75% basis.
Mr.Hill felt that a heavy water user should be charged more than someone who uses
minimum water.Mr.Townsend stated that it can be done statistically so that the
city will come up with a unit rate per resident but will know what the volume is
and can apply that to a volume rate.It was the consensus of the Council that Mr.
Townsend work up some figures on this using the $174,000 figure.
Mr.Gavinski stated that the surcharge for users outside the city was to cover the
costs of maintenance on the system.The city water increases the value of the
property outside the corporate limits but the city does not gain any of the benefit
from the increase in the assessed valuation.
Clyde Owen from the Port District and Herb Snelgrove from the Housing District both
spoke in protest of the surcharge and the high sewer and water rate increase.
^J There was considerable discussion by the Council and members of the audience on the
surcharge.
The next study session will be on August 4,1981 at 8 p.m.in the Council Chambers.