NEWS

Sublimity water-fund deficit spurs rate increase

Justin Much
Stayton Mail

Water rates will increase for Sublimity residents as the town seeks to fill a gap in its water-fund balance.

Sublimity City Council approved the water-rate increase during its April 10 meeting, voting 3-1 in favor with Councilor Jim Kingsbury opposing. Councilor Michael Taylor was absent.

The increase would, among other things, raise the base rate from a state-low $7 to $15 per month.

In February City Administrator David Marshall reported to Sublimity City Council that he was in the process of examining outflows in the water fund, which has lost money over the past 3 years to the extent that it currently ran a negative fund balance.

Marshall advised that a water report and recommendation be formulated by July 1, 2017 (the next fiscal year) to address the deficit and accrue funds available for infrastructure issues or other costs that could emerge.

“We can’t have a negative fund balance,” he asserted.

On Monday Marshall apprised the council that the city could be “reasonably assured” that it could cover costs in the water fund in the fiscal year of 2018 by raising the base rate to $15 and increasing the variable or flow rates by 30 percent.

“Each of those actions would basically, give or take about $15,000…generate between $144,000 and $160,000 (to cover the funding deficit),” Marshall said. “If the water fund indeed generates just $290,000 in costs, then we should just cover those costs; expenses last year were $286,000.”

That deficit patch assumes the city’s transfer of between $75,000 and $90,000 from the waste-water fund to zero out the negative fund balance of this year’s water fund, which was at $51,000 in red at the end of March. The fiscal year ends June 30.

In addition to raising the base rate, the city will raise the number of tiers in its service from 5 to 7; tier rates hinge on usage. Marshall estimated that the new configuration could raise about $150,000 each from the tiered-rate and base-rate adjustments, roughly covering the city’s water-service costs.

Kingsbury sought to gauge individual bill increases by itemizing the plan in accordance with his own bill. He posed the example of a customer using 9,000 gallons a month. He added the base rate of $15 to $1 per 1,000 gallons for the first 5,000 gallons, then up to $1.03 for each following 1,000.

“Just so everybody knows how much it’s going to go up, with this rate, I was charged $14.60 in January, and with this new rate schedule it would be $24,” the councilor said.

“I was thinking that might be too much,” Kingsbury said, referring to the base rate.

“We talked about raising it in increments; maybe three or four dollars this year and maybe three or four dollars next year,” Mayor Raymond Heuberger said. “I think we’re just putting off the inevitable.

“According to state law we have to get enough money to cover this fund.”

Heuberger, Marshall and Councilor Jim Crowther collectively noted that even with the increase Sublimity’s rate remains one of the lowest municipal rates in Oregon.

jmuch@StatesmanJournal.com or cell 503-508-8157 or follow at twitter.com/justinmuch

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What's next

What: Sublimity City Council meeting

When: 7 p.m. Monday, May 8

Where: Sublimity City Hall, 245 NW Johnson St.

Contact: 503-769-5475; info@cityofsublimity.org

Web: www.cityofsublimity.org

Sublimity, OR