'Equity' cited as main reason for water rate hike

Residents of Rest Haven Drive say the city’s latest increase in sewer rates is unfair when their neighborhood already pays higher rates than other city users.

“My rates have doubled in the last 12 years and this latest increase strikes us as unfair,” Rest Haven Drive resident David Trousdale said. “There’s no justification for the cost increase. Customers like us already have substantially higher rates. There needs to be a revision to the methodology to create equality.”

But equality is exactly what the city of Whitefish says it aims to accomplish by revising its water and sewer rates based upon the recommendations of a recently completed rate study. City Council Sept. 6 unanimously approved an increase to its water and sewer rates.

Beginning Oct. 1, the standard residential water user will see an increase of 1 percent, or about 25 cents per month, from $40.53 to $40.78 on their bill. The monthly standard wastewater user will see an increase of $4.53 or 13 percent, from $35.04 to $39.57.

“The reason we undertook the cost of service study was to make sure there is equity in the billing system,” City Manager Chuck Stearns said. “No one likes these increases, but hopefully through these increases we are getting to more equity.”

Stearns noted that while the total dollar amount paid by Rest Haven residents is higher than those who live in the city where sewer doesn’t require pumping to the treatment plant, the percentage increase for those city residents is actually higher. The standard residential wastewater user rate for the volumetric rate charge is increasing by 26 percent, while Rest Haven is increasing by 11 percent, according to the city.

Public Works Director Craig Workman noted that the goal is to keep cost of service in line with the rates being charged.

“The study looked at all classes and all the costs that go into servicing those individual water and wastewater classes,” he said. “What we got was an exact number for the cost to service those areas. Some classes were much closer [for their rate] to the cost of service than others.”

Workman explained that residents on Rest Haven pay more in general because the properties are not within the city limits and use a Septic Tank Effluent Pumping system, which involves a septic tank that is then pumped into the city system, that is more expensive to maintain.

“Rest Haven is an expensive system,” he said. “It costs more in part because there is fewer people paying for the service of that system.”

Still Rest Haven resident Ron Hauf said the rates remain unfair pointing out that his base rate for wastewater will increase by $2.40, while the standard city user base sewer rate will increase by only 85 cents.

“This discriminates against some of us in certain areas,” Hauf said. “We pay a base rate. Why do we have to pay more. It’s not about the money, it’s the principle.”

Councilor Andy Feury, prior to the vote, also asked about the increases. He said he lives in a part of the city with a STEP system and pays more than the standard rate.

“The fixed cost (rate) covers the infrastructure, so I don’t understand the increase in the volumetric rate,” he said. “Why does it cost more per 1,000 of gallons of effluent, if the base rate covers the infrastructure cost.”

Workman said while the base rate does cover the fixed costs of the system, such as infrastructure, the wastewater that results from the STEP system requires a higher level of treatment.

“The wastewater from the STEP is much more concentrated and the volumetric cost is to treat the waste,” he said. “There is additional cost to maintain the infrastructure to handle the stronger waste.”

In addition to adjusting rates to better align with the cost of service, the city says the increases are necessary to provide for future capital improvement projects. The city is in the midst of planning for a new wastewater treatment plant at an estimated cost of $17.49 million. The plant is necessary for the city to meet new treatment standards for removal of ammonia, nitrogen and phosphorous as part of its discharge permit with the Montana Department of Environmental Quality.

The study suggested by making adjustments to the sewer rates, it will prepare the city for debt association with constructing a new treatment plant. The rate study recommended increasing water rates by 3.6 percent over the next five years, while wastewater rates could increase by as much as 95 percent over the next 10 years.

Councilor Jen Frandsen said she hopes future rate increases won’t be as high.

“We’re still looking to lower the cost of the wastewater treatment plant with grants,” she said. “It’s in the best interest of our rate payers to do everything thing we can to lower that cost. I know quite a few face higher increases. I wish we had been planning long before now for this, but hopefully the increases now will help keep future increases down.”

The city also made a change to its low-income and senior discount from an age-based system to an income verification system. The city currently provides a 75 percent discount on the monthly fixed base rate charge, but not the volume charge for water use by elderly and low-income residents.

Currently there are 418 participants on the discount list with a total monthly discount ranging from about $35 to about $90.

The program will now use the federal Low Income Energy Assistance Program application process to verify eligibility. There are 418 participants on the list and only 15 are known to qualify for the assistance program.

Workman said ending the discount based on age was recommended in the study because such discounts can be considered discriminatory.

“That’s the industry standard,” he said. “Discounts for the elderly anymore are few and far between.”

A few residents asked the city to reconsider changes to its senior discount policy.

Karen Larsen said the loss of the senior discount is going to be a challenge for many people.

“I wonder if any consideration was given to grandfathering in those of us who are part of the senior program,” she said. “For many of us the decision to rent or buy is decided by utilities and that decision has already passed us by. For us, it was a tremendous relief to find the senior discount program. If you’re patient those of us who are seniors will be dying out and new people will be coming in.”

Councilor Katie Williams said she feels for people having to pay increased rates.

“I’m concerned we’re pricing people out,” she said. “We need to make sure we can keep people in this town. I can feel the pinch and I know people from ages 26 to 80 can feel the pinch.”

If none of the roughly 400 residents currently on the discount list qualify for the means test, the city would raise about $171,000 in additional annual revenue.