By Sharon Michael, The Chronicle, 12/1/98
Who will bear how much of the cost of Centralia's water and sewer system improvements was the primary question Utilities Director Dick Southworth posed to the city council Monday night.
At this point, the 1999 budget includes rate increases of 50 percent for water and 25 percent for sewer.
But council decisions on connection charges, financing options, the timing of borrowing, and residential and commercial rate adjustments will determine how costs are finally distributed among water and sewer customers.
''We need to move on rate increases, but we also need to provide direction to the consultants,'' City Manager Tom Reber told the council.
FCS Group is conducting a study to help the city establish six-year water and sewer rate schedules that will bring in enough money to pay for systems maintenance and new construction.
Rate increases between 150 and 300 percent could be required by 2004 to pay for repairs, increased capacity to accommodate growth and new treatment facilities. If the city doesn't secure state and federal grants and low- or no-interest loans, rate increases could soar even higher.
Centralia water rates were last increased 10 years ago. Reserve funds have been used recently to make up operating cost deficits.
On Nov. 2, David Findlay of FCS Group told the council immediate water rate increases of 50 percent were needed just to cover operating costs. ''You're not meeting the covenants on bonds right now, and that's an issue,'' Findlay explained.
In October, state auditors also noted the city's failure to maintain adequate revenue-to-debt ratios required by water bonds.
Continued failure to match water system charges to operating costs could hurt the city's ability to finance new water and sewer system projects, including a new wastewater treatment plant estimated to cost between $50 million and $80 million.
The multimillion-dollar facility is planned to meet state Department of Ecology wastewater discharge permit conditions, and to provide additional capacity for new development. A mediated settlement with Ecology commits the city to completing the new plant within eight years.
''One of the things we need to do is get your house in order,'' Findlay told the council last month. ''If you're delaying making the tough decisions, you're making the later decisions even tougher. We need a long-term strategy from you. The practicality is, if we need 150 percent rate increases we need to have (those increases) in place by the end of 2002.''
Monday night, Southworth said a Jan. 1 date for rate increases would now be difficult to meet.
Councilors said they need time to review options offered by Southworth, but they agreed to discuss water and sewer rate issues when they meet next Tuesday.
Buffi Bloom, president-elect of the Lewis County Rental Association, urged the council to seek state money to help pay for the new wastewater treatment plant to minimize rate increases that landlords would have to pass on to tenants.
Bloom, a Chehalis resident, said she owns 30 low-income rental units on North Tower in Centralia.
''Trust me, Mr. Southworth and the city are chasing every grant or low-interest loan we can get our hands on,'' Councilor Tim Browning told Bloom.
But Councilor George McCarty said state money is ''pie in the sky right now. The Department of Transportation might come through. DOE (Ecology) might come through.''
''We're as anxious as anyone to keep these increases down,'' added Councilor Bill Moeller.
Moeller noted councilors, most of whom are retired, also will have to pay the higher rates.
''This council is very conservative,'' Mayor Pro Tem Joyce Barnes assured Bloom. ''We are watching your dollars, as well as ours.''
Sharon Michael covers Centralia and Chehalis city governments for The Chronicle. She can be reached by e-mail at smichael@chronline.com or by calling 807-8237.
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