Proposal would mean hefty utility rate hikes

The rates Oak Harbor residents pay each month for city-provided utilities will increase by about $50 over the next five years to a total of $233.41 if a new proposal is adopted.

That’s an increase of about 24 percent.

Much of rate escalation would be for sewage treatment, or wastewater, because of unanticipated costs associated with the new sewage treatment plant.

The rates may decrease, however, if the Navy agrees to pay the city to clean its sewage.

Shawn Koorn of HDR Inc. presented the city council with the latest rate study at a workshop Wednesday; he said increases will be necessary to keep all of the utilities financially sustainable. He explained that sewage, solid waste, water and stormwater — or storm drain — are utilities that are operated on a stand-alone basis. They are funded by money received from ratepayers.

Koorn proposed increasing wastewater rates by 7.5 percent this year and the next two years, followed by 3.5-percent increases in 2023 and 2024. The hikes are more than previously projected.

The rate is currently $102.76 a month and would increase to $110.47 later this year. By 2024, it would be up to $132.82.

Koorn said the cost of electricity at the new sewage treatment plant was more than previously anticipated. In addition, Finance Director Patricia Soule said flood insurance for the plant, which is located next to the waterfront, was not planned for.

City Administrator Blaine Oborn said the rate study would have to be redone if an agreement is reached with the Navy to hook the Seaplane Base to the treatment plant.

“Certainly it would help us,” he said, “but I don’t think we’re going to make any projections on how much it would go down. But certainly when you’re looking at a 7.5 percent increase, you would hope it would maybe come on sooner than later to defray some of that cost.”

The Navy asked the city for price quotes on various options for sewage treatment and infrastructure. Last May, the city proposed a $38.5-million buy-in fee and about $2.5 million a year for operations.

Mayor Bob Severns said the Navy is two months late in getting back to the city with a counter-offer.

The plant cost about $149 million. If the rate increases this year, it will mark a 300-percent increase since 2012, when residents paid $36.52 a year.

Koorn showed the council a comparison of sewage rates between Oak Harbor and other communities. He pointed out that the cost in Oak Harbor was ahead of the other communities, except for Blaine, which is the only other community with a similar treatment facility.

Both of the cities are ahead of the curve on state environmental requirements, Public Works Director Cathy Rosen said.

“Keep in mind when you look at this,” she said about the comparison, “that those other cities are going to have to do upgrades to their treatment plants to reduce their nutrient discharge into Puget Sound.”

Oborn said the other cities will also have to build facilities with improved technology to clean discharge before new state standards are enforced, but it will likely be more expensive for them in the future. Someday, he predicted, Oak Harbor will be the city with the low rates on the comparison chart.

The percentage increases for solid waste rates are the same as wastewater over the five-year period; however, solid waste rates haven’t changed since 2007 and a worldwide crisis in plastic recycling is affecting costs across the globe.

Currently, the monthly rate for pickup of a 20-gallon cart is $29.06. If the proposal is adopted, it would increase about $2 this year and continue going up each year until it gets to $38.67 in 2024.

The cost of recycling plastic skyrocketed just about everywhere after China stopped accepting most kinds of plastics. The cost for the city to dispose of plastic went from $45 a ton in June of 2018 to $135 a ton in October of 2019. Garbage tipping fees also increased by 26 percent last year.

The proposed water rate increases are 4 percent for four years and 2 percent in 2024. The base rate for a typical residential connection is currently $26.25 plus a consumption charge; the lowest rate is currently at $2.85.

Under the proposal, the base rate would increase to $31.63 by 2024 and the consumption rate would be $3.43.

The rates are affected by $7.5 million in capital facility projects for water utilities planned in the next few years, Koorn said.

Stormwater rate would increase 4 percent each year from 2020-2022 and 2 percent in 2023 and 2024. The rate is currently $14.22 a month and would increase to $16.65 by 2024.

Koorn said construction projects are also planned for stormwater facilities.

The council is scheduled to decide whether to adopt a new rate schedule at the Feb. 18 meeting.

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