City councilors decline utility rate study

Majority questions cost while staff say it’s routine

The cost for a study of Sequim’s utilities was too high for most city councilors.

The Sequim City Council last week voted down a proposed $89,800 contract with FCS Group 4-2, with Jennifer States absent, to review the city’s utilities.

Councilors Bob Lake and Candace Pratt voted in favor of the review at the Sept. 23 meeting.

Councilor Ted Miller said city staff budgeted $100,000 and were “determined to spend it somewhere or another.”

“I see no reason to spend any money at all on a utility rate study; (it’s) not out of whack enough to justify doing one,” he said.

“I think we should vote this whole thing down.”

Public works analyst Sarah VanAusdle said prior to the vote that the proposed rate study was routine, was completed every six to seven years, and was scheduled for 2020.

“It makes sure revenue supports the expenses over a period of years and makes sure the rates and fees are in compliance with state law,” she said.

The city’s last utility study was adopted by city council in 2014 and adopted rate structure changes for 2015-2018.

VanAusdle said that after comparing the city’s two latest studies rate discrepancies were discovered from 2011’s rates, resulting in a more fair system between how much residents were paying versus using for water and sewer services.

Councilor Bob Lake said that after interacting with local widows which providing tax support, he feels they pay too much.

“I think they’re paying way too much a part of the water and sewer bill compared to what they use,” he said.

“The rationale is it’s more stable to have a big fixed rate and a small marginal rate. We’re not a business. We’re a government. I think we need to put our people first.”

Lake proposed the utility study with an emphasis on seeking options based on utility usage compared to fixed rates.

VanAusdle said the proposal could have offered up to three different utility rate models for city councilors to consider.

City councilor Brandon Janisse also questioned the purpose of the study using the approximate $64,000 study of John Wayne Marina infrastructure as an example.

“I’m concerned. We paid less for something we don’t know about (the marina), but we’re paying $40,000 more about something we should know about,” Janisse said. “One-hundred thousand dollars is a police officer. It’s something … I don’t understand what we don’t know that costs $100,000.”

VanAusdle said she’s not an expert in utility rates and state regulations and industry standards.

“If we were in a larger agency, we’d have people who were experts,” she said.

“We do the best we can based on work that was done previously. We do annually review it to make sure we’re on target. Also with our revenue to make sure we support our (Capital Improvement Program) for the next six to 20 years. We do springboard off of what was done by an expert.”

Janisse said he respects the work of Public Works staffers but wanted to know what the study would clarify for city staff.

“We want to make sure our rates are accurate and we’re being fair to our customer,” VanAusdle said. “We don’t have the expertise in-house to delve into the data.”

City Manager Charlie Bush said a utility rate study is a “heavy lift” for staff.

“There is a level expertise that is outside of our realm at this time,” Bush said. “This gives us strategic direction with our rates for the next five-10 years. It’s common practice among communities and it’s one of the things that helps us keep our utility rates healthy.”

In next year’s proposed 2020 city budget, city staff propose a water utility rate increase of 4 percent but no changes to sewer or General Facility Charges in 2020. They’ll discuss the budget again at the city council’s meeting on Oct. 28 and again at public hearings on Nov. 12 and 25.

For more information on the City of Sequim’s utilities, call 360-683-4908 or visit www.sequimwa.gov.

Reach Matthew Nash at mnash@sequimgazette.com.

Sequim city staff said following a rate study in 2014, a consulting firm found discrepancies that resulted in more fluidity between the rate citizens were paying and using except in one incidence of commercial users compared between 2011 and 2018. Photo courtesy of the City of Sequim

Sequim city staff said following a rate study in 2014, a consulting firm found discrepancies that resulted in more fluidity between the rate citizens were paying and using except in one incidence of commercial users compared between 2011 and 2018. Photo courtesy of the City of Sequim