City raises utility rates despite public outcry

The average Oak Harbor family’s utility bill will be nearly $200 per month next year.

Oak Harbor City Council said yes to several utility rate increases despite a group of citizens railing against both the hikes and city spending.

The residents sent their blistering written comments prior to the Tuesday night council meeting. They were displayed on the screen during the online session.

“We shouldn’t have to pay for the mistakes you made on the poop plant! It’s BS!” resident Kristi Dutton wrote.

Alex Bennett echoed her sentiments.

“Do not dare try to pin the tax-paying citizens of Oak Harbor with your mistakes,” Bennett wrote. “Maybe you need to learn to budget appropriately like normal educated people do.”

After months of delaying the utility rate increases to lessen the pain for those impacted by the pandemic, the council approved modified increases in a 4-2 vote. Councilmembers Joel Servatius and Jeffrey Mack voted against the increases.

Under the approved plan, the average family’s combined utility bill will be nearly $200 per month next year — an increase of 6.9 percent from 2020, according to city estimates.

Customers can expect to see the new rates reflected in the first billing in January, said consultant Shawn Koorn of HDR Inc. He presented multiple rate studies to the city council this year to try to find a way to smoothly raise utility rate increases.

Despite heated public comments this week, council members voted to approve an ordinance setting utility rates for water, sewer, solid waste and stormwater services. Some of the rates had remained unchanged for many years.

In fact, the rates for garbage and recycling had not changed in more than a decade, according to the city.

Sewer rates will see the largest increases over the next two years — 10.5 percent in 2021 and 7.5 percent in 2022. Then it is projected to increase by 6 percent in 2023 and 2 percent thereafter. It’s driven by costs for the city’s $150-million sewage treatment plant.

Solid waste will increase by 9.5 percent in both 2021 and 2022. It’s projected to rise by 9.5 percent in 2023 and by 4 percent in 2024. It’s driven by rising costs at Island County’s solid waste facility.

Stormwater rates will not change in 2021, but will increase by 2.5 percent in 2022. They are projected to rise by 2.5 annually through 2024.

The water rate will not change in 2021 or 2022, but it is projected to increase by 3 percent annually thereafter.

The rate increases utilized hundreds of thousands of dollars from each fund’s reserves in an effort to smooth customer bill impacts.

Council members also voted to approve a one-time $400,000 transfer from the city’s stabilization fund to the wastewater utility fund.

The excess fund is set at just over $1.5 million and earmarked for emergencies or exigent circumstances.

City officials said the wastewater rate increase is still necessary even after the transfer, explaining it only helped to ease the rate hikes.

The 13 residents who commented were upset with the rate hikes and city spending.

“MY WATER BILL IS TOO D___N HIGH,” Juan Sebastian Gaviria Chary wrote in all caps.

“Fixed income people can’t afford these increases,” Rebecca Dunbar wrote.

“Why does this city have to continuously make it harder and harder for working class people to make ends meet?” Nicole Betz asked. “Enough is enough.”

“Please don’t raise our rates. Life is already hard with everything going on, especially for small business owners such as myself,” Calysta Webb pleaded.

Councilmember Tara Hizon said the citizens’ comments underscored the city’s need for having a public information officer.

“The majority of those are, I suspect, the result of a massive misinformation campaign. They were just parroting the same false narrative over and over,” Hizon said.

“So yeah, despite the multiple presentations and meetings, all of which are viewable and easily understandable, there’s clearly a major misinformation narrative happening.”

Servatius said he didn’t think the city had a good record of instituting gradual increases in the past. He added he thought the hikes should be pushed out.

“Rates have gone up because this is a project that was needed and it has to be paid for,” Servatius said. “Having said all of that, while this is something like I said I would normally approve, at this time I’m struggling with and don’t think I can approve it” because of the current economy.

Council members asked if there was any way to further delay the increases, but staff said that it would prolong the problem and potentially create more issues.

Koorn said the city could use reserves and current revenues to pay its wastewater debt in the short-term, but that the reserves could disappear in a year or two.

The bigger issue, Koorn explained, is that, if the city enters into technical default on any of the loans or the revenue bond, then the bond could become “callable,” meaning that investors could demand repayment.

The revenue bond makes up a “good chunk” of the wastewater debt, he said.

“A couple years ago there were several municipalities that went bankrupt,” Koorn said. “That was part of those issues —- they were unable to fund that debt service, that debt service became callable, and they were unable to pay that debt.”

Hizon said she couldn’t let that happen.

“That cannot be an option for us as city leadership,” she said.

Mack asked if the city had looked at all of the options to save money.

“I wasn’t born yesterday,” he said.

“Franky, I see some room where we could be doing some trimming, and as good stewards to show our residents that we’re willing to suffer as a city to get through this pandemic and make it over this hump.”

Mike Bailey, a CPA who served as interim finance director, said he had no other suggestions to mitigate the rate increases and delaying the decision would only make it worse.

Bailey reminded the audience that assistance is available if people need help paying their bill and that they should contact the city’s utility billing staff.

In the end, Mayor Pro-Tem Beth Munns and Councilmembers Millie Goebel, Tara Hizon and Erica Wasinger voted in favor of the proposal, while Servatius and Mack were against it. Councilmember Jim Woessner was absent.

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