Proposed water, sewer rate increases in Bonney Lake

If you live in Bonney Lake, your water and sewer rates may go up this summer.

At the April 18 Bonney Lake City Council workshop, the council members were presented with study results of the proposed rate increases for water and sewer services.

Angie Sanchez and Chris Gonzalez of FCS Group ­— the company hired to consult on the utility rate and fees — led the presentation.

According to Sanchez and Gonzalez, the proposed rates would need to increase due to upcoming capital projects.

Additionally, several full-time water and sewer employees are planned to be hired in Bonney Lake and Sumner, a necessity for keeping up with state regulations.

“We want to make sure that the revenue that is coming in is sufficient to cover the overall operating maintenance and capital cost for each of those particular utilities on a stand-alone basis,” Sanchez said, referring to the increases needed to fund the projects and new full time employees.

The capital projects that are scheduled will require $26.3 million for water and $9.8 million for sewer. More than $2.5 million is coming from both water and sewer revenues are needed for Bonney Lake’s new Public Works Center. Other projects include supplies and storage, pipelines, and meters.

The proposed rates are expected to cover these capital costs, but the numbers do not assume future debt, Sanchez said.

The council discussed the proposed rates at the May 2 workshop and sent the matter to the Financial Committee for further review.

HOW MUCH WOULD THE RATES GO UP?

The study results were based on single-family residences that use 700 cubic feet (7 centum cubic feet or, 7 ccf) of water or sewer per month, which comes out to 5,236 gallons.

According to City Administrator Don Morrison, the average range for a single-home family is between 4 to 10 ccf, but 7 ccf is the common figure used in Washington state.

As of right now, the existing monthly bill is $24.06 for a household that uses 7 ccf of water. The proposed rate would increase by nine percent, resulting in $26.23 for the last half of 2017 and then $28.59 in 2018.

With these projections, the annual rate adjustment would decrease to 5 percent, but the cost of water usage would increase to $37.11 by 2022.

For sewer rates, the annual rate adjustment would go from 5.5 percent in July 2017 to 3 percent by 2022. In July, the sewer rates would increase from $83.08 to $87.65, and the projections would place the monthly rates at $108.17 a month in five years.

The current residential monthly bill for water and sewer together is $107.14 at 7 ccf and it would increase to $113.87 in July 2017. With the proposed rates, the combined bill would be $145.28 a month in 2022.

When comparing the proposed costs to current rates of other cities in the south sound area, Bonney Lake would be third behind Seattle and Enumclaw in terms of water and sewer combined, according to the FCS study.

Gonzalez said that the city’s new system plan had a list of capital projects that were sorted by year.

“We originally ran with that and the rate impacts (for sewer and water) were even higher because we had to have all this cash right now or within the next year or two,” he said.

With the original plan, the rate impact would have been 30-40 percent in 2018. To come up with the official proposed rate charges for water and sewer, and to have a smoother rate impact, some projects would need to be deferred, he explained.

“We tried deferring a couple of the projects by one to two years to match the available cash funding,” Gonzalez said.

WHAT ABOUT THE SDCS?

Gonzalez also presented proposed System Development Charges (SDCs).

SDCs are a one-time charge for new connections to the city’s water and sewer systems so that they pay for their share of the cost of the capital infrastructure that provides service, he said.

“The SDC in most cases is going to be more of a reimbursement charge just by the way growth happens. I mean, you have to build the facilities and pay for them until growth comes to reimburse you so that’s what the SDC, in part, does,” Gonzalez said.

SDCs are required whenever a property owner or authorized agent applies for a water permit in order to connect a residential home or a development to the city’s water and sewer systems. Along with the SDC charge, an installation charge is paid as well.

Residents are required to connect to the city’s sewer line when their septic system breaks and they are within 250 of an active sewer line, or when a house is sold within 250 feet of an active sewer line.

Sewer lines are automatically expanded to connect to commercial properties when they are built.

Existing city facilities and new or expanded city facilities that would provide water system services are exempt from these charges.

The proposal for Bonney Lake’s SDCs would increase from $19,600 to $20,372 — a difference of $772.

Bonney Lake already has the highest total SDCs in South Puget Sound, according to FCS’s study. Auburn is currently the second-highest with a total cost of $17,852 for water and sewer connections.

Gonzalez made it clear that the city didn’t have to raise its SDCs, though he said that the increase would be justified.

“Based on your cost, this is the maximum that we can justify given industry-approved methodology… if you don’t raise your rates for any number of years, you’re going to go into the ground,” he said, referring to the $20,372 proposal.

One of the costs would be investments required by the Department of Health before Bonney Lake’s new improvement plans can be approved.

“Otherwise, you just have to keep deferring projects or go further into debt and that’s something that we tried to avoid doing,” said Gonzalez, talking about why the FCS Group proposed the increase to the SDCs.