Councilman explains position on rate increase
September 28, 2009 · 5:19 PM
Why did the Enumclaw City Council vote unanimously for a 55 percent sewer rate increase a few weeks ago? As a member of the City Council, I’d like to explain my reasons for voting for the rate increase. I have two reasons for making this very painful and expensive decision.
First, I voted for the rate increase because I felt like my back was to the wall. I didn’t feel I had a choice. If I voted “no,” the sewer utility’s costs would continue to hemorrhage (more money going out than coming in) and the rate increase down the road would be even higher. I don’t believe that would be good stewardship of the ratepayers’ money.
Secondly, the mayor’s plan was to increase rates by 35 percent in September and then another 20 percent in January. Doing that would mean our reserves would continue to drop and we wouldn’t be getting on a sound financial footing. Our credit ratings would be lower and the long-term costs to the ratepayer would be even higher since we couldn’t get low bond interest rates.
It’s like borrowing money for a house. If you have a good credit score the cost of borrowing is cheaper. If costs outrun income, credit ratings drop. In the next couple of years the city will have to borrow money to finance the sewer treatment plant debt. All the ratepayers, including me, would have to pay more down the road in higher interest rates if I would have voted “no.”
The choice facing me was, “Do I decide for the long run, bite the bullet now and pay the price early, or do I take the politically easier short-term approach and raise taxes twice in smaller amounts?”
I chose to act in a way that I felt was in the best interests of the citizens of Enumclaw, even though it wasn’t going to win me any popularity contests. The rest of the council, the city finance director and eventually the mayor, agreed that raising the sewer rates by 55 percent was the most financially sound decision under the circumstances. That’s why the vote was unanimously in favor of it.
I hope my letter answers some of the ratepayer’s questions about such a stiff increase. Believe me, it wasn’t an easy decision to make.
The question I haven’t answered that you’d like to know is, “How did we get into this mess in the first place?” The original cost of the project was between $16 million and $17 million. The final cost will be $33.4 million. The project was three to four years late in its completion.
Some of the delays and costs were unavoidable due to the state’s indecision over environmental rules and the steep rise in steel prices, but that doesn’t explain all the costs. In my opinion, had the council been more frequently appraised of the cash flow problems with the utility it’s likely we would have been able to avoid such a steep rate increase.
To defend the actions of the council, let me clarify the roles of the different branches of city government. The council’s role is to set policy. The administration is responsible for managing day-to-day operations, including the budget.
My heart goes out to all of the city ratepayers for having to bear this increased utility burden in the middle of the greatest economic downturn since the 1930s. I wish I did not have to vote for such a large rate increase, but I saw it as the only choice before me.
Enumclaw City Council