City faces big utility rate hike

Capital projects, some of which need expeditious action, are threatening to exact themselves on Oak Harbor utility bills to the tune of an almost 14 percent increase.

Finance Director Doug Merriman laid out the cost increases for the City Council Tuesday night. Of the four utilities, solid waste, sewer, water and storm drains, only the latter two are crying out for help.

If the city were to implement all of its proposed projects, totaling approximately $19 million, utility bills would increase by 13.79 percent. To place the percentage in context, Merriman said his bi-monthly bill of $206 would jump to $235.

City staff is considering sending the bills each month to soften the blow.

“It would just even it out,” he said.

The City Council passed a 14 percent utility rate increase last year, which was largely because of the high cost of construction projects.

The water fund, which on average accounts for 40 percent of utility bills, will raise city costs significantly.

Anacortes’ capital woes have become Oak Harbor’s problems. Twenty-five percent of the city’s annual budget is used to purchase water from the Skagit County municipality. A full load of capital projects has increased Oak Harbor’s costs by 28.5 percent. Oak Harbor residents will see a 7.13 percent jump as the rates are a quarter of the total budget.

Construction of a 3 million gallon water storage unit will alleviate low pressure problems on the west side of the city. It will also cost $3.5 million and carry with it an estimated rate impact of 4.15 percent.

The Ault Field waterline extension and additional projects will cost a total of $3.5 million and mean a 5.34 percent rate increase. Operational costs — the “costs of doing business” — will further drive up rates an additional 4.68 percent.

Throw in the cost of moving water lines for state construction projects, and the water utility increases $746,000, a 24.6 percent jump for Oak Harbor. Water accounts for 40 percent of a utility bill, therefore residents will find a 10.7 percent increase.

Storm drain costs will jump because of a costly outfall repair and two other storm drain projects. Design for the outfall repair will cost $300,000, which will come due this year. Construction will total $1 million. All of the projects combined will be $2.3 million, increasing rates from $7.70 a month to $12.32.

The proposed hikes are not set in stone. Merriman will present a formal rate increase proposal next month.

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