TOWN OF FRIDAY HARBOR

Town utility rates go up $9.15 per month in January

posted 12/20/05
Owners of single-family residences will see a $9.15 monthly increase in their Town of Friday Harbor utility bills. The Town Council voted 4 to 1 to approve the increases effective Jan. 1, 2006.

According to Town Administrator King Fitch, single-families residences are 80 percent of the utility customers. The increases break down to:

• $5.61 for water
• $1.09 for sewer
• $1.45 for refuse
• $1 per Equivalent Resident Unit (ERU) for storm water

Councilmember Wally Gillette voted against the increases. Referring to the 8.5 percent increase in water rates he said. "Our system is almost the highest in the state. We must be doing something wrong. There is something systemic wrong and I believe it is the rate structure."

The rate structure is set up to encourage water conservation. Customers who use more are charged a higher rate per gallon. Gillette argues such a system makes sense only in a drought situation. When a drought does not exist, the town could increase its sales by lowering rates, according to Gillette. Gardeners could water their gardens and the town would make more money.

Mayor Gary Boothman asked Gillette, "Would you like to make a motion?"

Councilmember Howie Rosenfeld said, "Don't encourage him."

Councilmember David Jones was concerned about the integrity of the rate structure. He noted underwriters look at it when issuing loans. "Even a 1/8th percent change in the rate of the laon dwarfs the amount we'd save."

Jones, who was sworn in as mayor at the end of the Dec. 15, 2005 meeting, said he would like to "spend some time of the council evaluating taking some money out of the general fund" to offset rates. Rosenfeld had mentioned doing that earlier in the meeting. The council agreed to discuss the idea before the next budget cycle.

Utility tax dropped,
no savings for rate payers

posted 12/14/04
Friday Harbor Town Council eliminated the 3.9 percent tax that had been imposed on the refuse, water, sewer and storm water utilities for the past 14 years. The tax was calculated on the gross revenues of each utility. Revenue from ratepayers was used to pay the tax. The tax was embedded in the rates and not listed as a separate item on utility bills.

The council passed an ordinance creating the utility tax as a way to cover administration costs incurred by each utility. For the past several years the administrative costs have also been added to each utility. The funds from the utility tax were moved to the current (general) fund and used for the street department.

Dropping the utility tax will not result in lower rates for customers. Councilmember Howie Rosenfeld asked why rates wouldn't be lowered. Town Treasurer Wendy Picinich said the money "had been sucked up by other costs."

Town Administrator King Fitch said the 2005 budget included increased expenditures. For example the water department budget included $20,000 to replace water meters.

Rosenfeld noted the water utility tax was approximately $44,000 a year and the increased cost was $20,000. He said, "But they've only gone up by half. Why couldn't we lower rates?"

Picinich replied the ending balances would be lower if the council did that.

Councilmember Carrie Brooks said, "Wendy likes to have the cushion to pay bills at the beginning of the year. I don't think we can do it (lower rates) ahead of time." She suggested the council could relook at the revenue at the end of the year and make adjustments then.

Fitch reminded the council the savings being put aside for future capital improvements will not cover all of the costs. "Any savings at the end of the year should go to capital," he said.

Rosenfeld had trouble reconciling the council's actions. The council agreed to pay the waste water treatment plant contractor an additional 50 cents per hour for the labor done during the construction of the new sewer plant. The company did not want to absorb the cost of a Labor and Industry fee increase that went into effect after the contract was awarded. Rosenfeld said, "I'm having a hard time putting this in perspective. To construction vendors we say, 'here, take the money'. I wish we could treat our customers as generously as we do them."

The council will vote on a planned 8.5 percent increase in water rates at the Dec. 16, 2004 meeting.

Town to drop utility tax

posted 12/01/04
For the past 14 years, the Town of Friday Harbor has imposed a 3.9 percent utility tax on the gross revenues of the water, sewer, refuse and storm water departments. The money was moved from each department into the current (general) fund and used to help fund the street department. The tax will be dropped in 2005.

Town Administrator King Fitch said the tax was collected to cover the costs of administering the various departments. Since the town charges each department a portion of administrative, financial and system (computer) administration costs, the tax should not be collected.

In 2002 the four departments paid more than $125,000 into the general fund. In 2003: $133,400. In 2004, year to date $102,409.46 has been collected.

Each utility is run as a business. Revenue comes in from rate payers. The water department paid $44,100 in 2003. So far in 2004, $34,180 has been paid into the general fund. The effect on the water rates has not been discussed at Town Council meetings.

A public hearing on an 8.5 percent increase in water rates is scheduled for the Dec. 2, 2004 town council meeting.

Water rate hike higher than first stated

posted 10/12/04
Town of Friday Harbor Administrator King Fitch recalculated the effect of the recently approved increase in water rates. "I mispoke on the effect of 8.5 percent," he told the Town Council October 8, 2004. The increase will be $5.36 a month for 80 percent of the town's customers rather than the $3.51 per month as previously stated.

8.5 percent increase in water rates

posted 09/20/04
Town of Friday Harbor water rates will rise 8.5 percent in 2005. A planned 4.3 percent increase in sewer rates will not be imposed. The council reviewed the rate study which the rates are based on during their Sept. 16, 2004 meeting. The increase will cost the average residential customer $3.51 per month. The Town will collect an additional $95,000 a year as a result of the rate increase. The water utility is saving money towards raising the dam and replacing distribution pipes.

Water rates set to increase March 1, 2003;
connection charges April 1

posted 02/20/03
Friday Harbor residents and business owners will be seeing an 8.5 percent increase in their water bills beginning March 1, 2003, if as expected the town council adopts new rate ordinances today (February 20, 2003). The council is also expected to approve a 90 percent increase in sewer connection charges and a 45 percent increase in water connection charges.

The council held a public hearing February 6, 2003. Four people spoke to the council about their concerns. "The model on which this town is being run is not working," said Discovery Inn owner Jim Smith said. "The rates are causing a hell of a burden on the people who live and work here." He suggested the council consider other means of financing infrastructure which would have a positive effect on the overall economy of the town.

Town Planning Commissioner Debbie Emery came to observe but ended up speaking as a private citizen. "I'll speak for myself and other people," she said. "I know you have a difficult job. I have lived on this island since 1975, It is getting harder and harder to live on the island because of the cost. Utility costs have gone up so high, it is getting to be more of a challenge to live here. I am speaking for the people that work here."

Resident Darryl Roberts said, "This is just getting to the point of absurdity. It is ridiculous building low cost housing in town, people won't be able to afford the water and sewer bills. You have to find other ways to meet the obligations. You can't keep piling it on the homeowners."

Resident Lee Sturdivant said, "I've watched four of you run (campaign) on keeping a handle on rates. It is time for a new model here. We bring all the people into the town and then lay on the people who live here the burden of paying for the infrastructure. Find a way for tourists to help pay for this."

Councilmember Howie Rosenfeld said, "I presented possible alternatives at the last council meeting. Don (Town Attorney Don Eaton), you were going to look into some of them." Editor's note: this quote was mistakenly attributed to Mayor Gary Boothman when the story was posted this morning. We apologize for the error.

One of the ideas was collecting money from owners of undeveloped property. Eaton said, "I made an offhand remark you can't get away with it. I was surprised by my research which indicated you may be able to do it. You could put a charge on undeveloped property for water, sewer and garbage."

Regarding using hotel/motel money for part of the cost of the sewer plant, Eaton said the town can do that within limits. The council could also use more money from the general fund. "I can't tell you there is law that says you can't do that," he said. "What you can't do is take money out of utility funds and put in general fund."

The town does impose a 3.9 percent utility tax on water and sewer funds. The revenue from that tax is transferred to the general fund to be used for streets. The Town Council adopted an ordinance in 1990 allowing the transfer.

Councilmembers Carrie Brooks and Howie Rosenfeld have expressed concern about the impact the new connection charges will have on low-income housing. Brooks asked if there could be some kind of deferral of the hookup fees for low-income housing.

Eaton said he was pleasantly surprised to find there was a statutory basis for such an idea. "There is a loophole in the prohibition against gifts for the poor and infirm, he said. "It looks like something could be done. I don't know if it would be foolproof."

Rosenfeld asked, "If we can identify additional revenue sources, say we come up with between $50,000 and $100,000 additional revenue, will we have the opportunity to lower any charges?" Councilmember Bill LaPorte had suggested at previous meetings, using $50,000 from the hotel/motel tax fund.

"I think King (Town Administrator King Fitch) has given thought to that issue," Mayor Gary Boothman said. "It would be a tough sell to bond sellers. It would be difficult to use (hotel/motel money) as a long range funding source." He suggested the town could set some hotel/motel money aside and then might be able to raise rates less in the future.

The ordinances setting the rates also call for the fees to be adjusted every year based on the Seattle Consumer Price Index (CPI). "It will have a compounded effect," said Fitch.

Majority of council ready to approve rate hikes

By Sharon Kivisto

posted 01/21/03
Friday Harbor Town Council agreed they should follow the recommendations in a recent rate study and increase water rates 8.5 percent, water hookup fees 45 percent and sewer hookup fees 90 percent. A public hearing will be held February 6, 2003.The increases are scheduled to be finalized February 20, 2003. It was undecided during their Jan. 17 meeting whether the increases would go into effect March 1 or April 1. The council decided not to include other sources of revenue in the calculations.

Councilmember David Jones said, "I don’t see how after reading these reports you don’t reach the conclusion of raising the rates. These are two businesses. We do have a fiduciary responsibility to run these as a business."

Councilmember Howie Rosenfeld said, "That is only true if this body continues to insist this is a user paid system." He suggested the town council could apply more money from sales taxes, hotel/motel taxes or a utility tax on property. "I would like us to look into all the possibilities before we just dump this on the rate payers. We need to open our minds to other funds rather than the rate payers. "

Jones said the council decided last year not to include other sources of revenue but to put the burden 100 percent on the ratepayers. "We could have told Tracy (the consultant) to assume more revenue but we made the decision not to do that. "

Councilmember Bill LaPorte suggested the town put $50,000 per year of hotel/motel funds into the sewer plant revenue. He made the suggestion three times during the meeting. His idea was met with silence from the other councilmembers.

In 2002, $280,000 saved up from hotel/motel funds was used to pay for part of the new wastewater treatment plant. No more funds from that source were included in the rate study. Town Administrator King Fitch said, "We didn’t put in the mix any contribution on an ongoing basis. We didn’t feel you had given us any consensus on that. These rates do not anticipate that. "

Former Councilmember Vonda Sheiman lobbied the state legislature to adopt legislation allowing Friday Harbor to use some of the hotel/motel money for the sewer plant. Senate Bill 6132 clarifying the definition of "tourism-related facility" was signed into law by Governor Locke on March 31, 2000. It said: Declares that nothing in chapter 452, Laws of 1997, or chapter 35, Laws of 1998, is intended to disallow any use or purpose permitted under section 1, chapter 290, Laws of 1994 as long as the use or purpose was proposed by the local government, but not implemented by May 20, 1997.

Utility rates are adopted a year at a time. Mayor Gary Boothman said the 8.5 percent increase equals " a double mocha. That doesn't seem to be a killer." The study recommends 8.5 percent increases through 2008 for a cumulative increase of 61 percent. There are 821 water utility customers.

Councilmember Wally Gillette disagreed with the mayor's assessment of the impact on residents noting there are a lot of increases facing citizens. He cited higher ferry rates as another burden residents are facing. "I feel bad about hitting clients with a double whammy. I see no need for water rate increases this year," he said.

Gillette questioned some of the figures used in the rate study noting they were based on 2002 budget estimates rather than actuals. He said he had found mistakes which equalled almost the amount that would be raised by the 8.5 increase in 2003.

Gillette also opposed increasing the connection fees fearing the 90 percent hikes in sewer fees would put a damper on construction. "The connect charge is a very regressive fee. If we kept that low, more people would build, and therefore more would use the services."

The town averages 20 sewer hookups per year. If the increase is adopted and 20 hookups are done, the town would collect an additional $90,000 in revenue in 2003. While the current hookup fees are included in the rate study, the new hookup fees are not.

Rosenfeld suggested two separate ordinances be drawn up, one for connection charges and one for rates. "We can get input from public."

LaPorte said, "Is there any doubt in anybody’s mind what the public is going to tell us?"

Boothman said, "Yes, people may say they understand."

Councilmember Carrie Brooks liked the idea of separate ordinances. She said, "We could not adopt the connection fees, but could adopt rate fees."

Jones disagreed, "l'd argue the opposite, adopt the study and then find other ways." He suggested the council could explore other funding sources later.

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