Bend City Councilor Mark Capell said hiking water and sewer rates “can be the hardest thing we can vote on” – and indeed, there was lots of debate Wednesday night before the council voted 4-3 to boost sewer rates 9 percent and water rates 5 percent – but not quite as soon as proposed.
Instead, councilors agreed to a motion from Councilor Sally Russell, seconded by colleague Doug Knight, to delay the planned July 1st rate hikes to October 1st, pushing them past the irrigation season when people pay the most for water.
No one on the council disagreed that a citizen advisory panel’s proposed rates, to cover badly needed system upgrades, are needed, although there was some grumbling that past councils had, in essence, kicked the can down the road by taking a politically easier stance and not raising rates to put money away for – thus leaving it up to them to face the bill and have residents foot it.
“This is a really difficult decision for me,” Russell said, knowing her proposed delay will cost the city some of the funds it’s trying to put toward millions of dollars in water and sewer projects. City Manager Eric King said just the three-month delay is expected to cost the city $600,000 to $700,000 in revenues it otherwise would collect in sewer and water bills.
The Sewer Infrastructure Advisory Committee had recommended the rate increases be a bit larger now, to reduce the ones needed later.
“From my perspective, the ratepayers are already experiencing some sticker shock,” said Knight, noting that residents have seen rates double over the past 10 years and “want some relief.”
Capell provided the contrasting information, as he often does, reminding colleagues that a chart they were shown earlier of what Oregon cities charge for sewer and water rates puts Bend “in the middle of the pack, an appropriate place to be when we’re building major infrastructure. That says we’ve been fiscally responsible.”
“Yes, a rate increase can be a very difficult thing, and from the council’s perspective can be the hardest thing we can vote on,” generating the most e-mails and negative reaction, Capell told his colleagues.
“It’s not a pleasant thing to do, but it’s the responsible thing to do,” he said. “We can postpone it, or spread it out over a couple of years. But in both cases, the ratepayers will end up paying more” down the road.
“I think the responsible thing to do is rip the Band-Aid off, take the heat,” he said.
Colleague Jodie Barram sided with Russell, saying the proposed rate is valid, but she’s “also very sensitive to community concerns.” Having been told the delay won’t stall the projects in the pipeline, she said, “I think (the delay) shows care for the community. … It mitigates some of the pain and discomfort.”
And there has been pain, all agree. Mayor Jim Clinton pulled out a chart he’d done, showing that combined water-sewer rates in Bend have jumped 72 percent since 2007, including a whopping 91 percent on sewer bills, while the Consumer Price Index rose just 14 percent over that time – and Bend’s median household income actually fell 1 percent.
“These rate increases have been totally out of sync from what residents have experienced, in terms of income and all the other costs of services they buy,” Clinton said.
The mayor urged colleagues to defer the rate hikes a few months, until a renewed discussion early next year of overhauling the whole water and sewer rate structure. Clinton has pushed for years for a fairer structure in which heavy users pay more than lighter ones, both in water and sewer capacity – something that’s not the case now. Councilors have agreed, but it’s a complex issue, easier said than done.
“The sewer (rate hike) is particularly bothersome,” he said. “Bend is one of the few cities with a constant sewer bill, no matter what capacity the household uses. That’s just so basically unfair that I don’t think we should be talking” rate hikes until that is changed, he said.
“Unlike Mark, who wants to divorce the rate hike from the structures (decision), I think they are intimately intertwined,” Clinton said. “Smaller homes have been overpaying (on sewer bills) for a long, long time.”
The average total water, sewer and storm water bill for households is “getting up to $1,100 a year” in Bend, Clinton said, which has “a huge impact on people.”
“I agree, the rate structure is wrong,” Capell responded, while noting that the city staff is setting up some advisory groups to bring in more information.
“We’re expecting by the first quarter to be adjusting the rate structure to have a more fair process,” Capell said, telling Clinton, “I love Ross Perot graphs like that. You can do a lot with numbers.”
The goal in the rate structure changes, Capell said, is a “revenue-neutral change. The goal is for large users to pay more, small users to pay less … but you have a revenue (need) they have to hit.”
Councilor Victor Chudowsky looked farther back, to when the city added sewers in the ‘80s – funded largely by federal grants and not ratepayers. They were built well beyond the needed capacity for the time, he said, crediting the councilors of that time for their foresight.
But colleague Scott Ramsay said councils since then had, in essence, kicked the can down the road and not set rates that would put aside funds for the upgrades they knew would be needed.
“I have said all along, we need to put planning ahead of politics,” Ramsay said. “Maybe previous councils just decided to push it off, make sure the ratepayers weren’t upset. So we’re sitting here today with the result of those previous decisions.”
“I think it’s fiscally prudent and responsible to get back on track,” he said. “We are at (sewer) capacity in many parts of the city, which is hindering economic growth, job growth. If we continue to cripple ourselves because we want to ease the burden and not take the (political) hit, then I have a problem with that.”
“I am not advocating to raise rates all the time,” Ramsay said. “But this puts money in the coffers for future councils to not have to make these kinds of decisions.”