By Carey Restino
The debate over water and sewer rate structure will continue for another month at least as the city council wrestles with the details of a new rate system they hope will result in a more equality among cost for users.
But after months of committee meetings and analysis, the council is still struggling with some of the figures. During a worksession Monday night, the city’s new finance director Zhiyong Li, told the council that it had miscalculated some of the rates because of a discrepancy in how the city bills for sewer. If they used the rates they had calculated for sewer discharge, the city would have come up $244,000 short.
“We have a choice before us,” said councilman Beauregard Burgess. “We can either accept the new rate to make the model balance, or we can eliminate the sewage rate charge and socialize it across the water users.”
City Manager Walt Wrede said the increased rate was needed because initial calculations were based on the total sewage discharge rate. The city, however, does not bill that way since some of the water that comes through the sewage plant comes from storm water. Instead, it bills users an amount equivalent to the amount of water they use. In areas like Kachemak City, where users are connected to sewer, but do not have city water service, an average per-household usage figure of 3,500 gallons per month is assessed. So while the sewer plant discharge is more than 107 million gallons, the amount billed in 2012 was only 97 million. Even more dramatically, people in the area serviced by a metered lift station were billed some 20 million gallons less than what initial estimates projected. As a result, fees in the lift station service area needed to increase significantly from the model that had been discussed for several meetings for the model to balance.
One of the vocal critics of the proposed changes to the water and sewer rate structure, Land’s End Resort, testified that even with the earlier calculations, the hotel’s water and sewer bill was going to rise dramatically, an extra expense that would likely cost some jobs at the year-round facility. If those figures increased even more, it would be a greater blow, they said.
Mike Dye, Land’s End general manager, said the changes brought into question whether the city’s task force was equipped to handle a restructuring process like it had undertaken.
“This is more than a task force like that can handle,” Dye said. “I hope you consider hiring a professional firm.”
Phil Morris, mayor of Kachemak City, called for an additional worksession between the two councils before any action was taken. He questioned the way Kachemak City’s sewer rates were calculated and asked for further explanation about how those rates were estimated.
“I don’t think a month or so is going to hurt the process,” Morris said.
Councilwoman Barbara Howard said she took exception to some of the criticism that the public had expressed with the new rates, which were intended to equalize the amount city residents pay for the service.
“When we are talking about sewer and water, Land’s End is never happy,” Howard said.
When the resolution finally came up for a vote, however, the council was divided on how it wanted to proceed. Several council members asked to postpone the resolution, but Burgess moved to amend the sewer rates to incorporate the new figures brought by city staff.
Councilman Brian Zack questioned the increase to rates for those in the lift station area, noting they were a 25 percent increase over earlier figures, and was the sole vote against the amendment.
Burgess then called for another amendment to add an additional four percent rate increase to account for depreciation on the water and sewer system overall, but councilwoman Francie Roberts and Zack both voted against that amendment, and it failed since Councilman James Dolma was absent. A call for the postponement of the resolution also failed.
In the end, the overall resolution failed for a lack of a majority vote with Councilman David Lewis and Zack voting against it.
In the council’s final comments of the evening, some expressed frustration with that vote as well as public comment on the rate changes.
Burgess said most small businesses in Homer would benefit from the new model, and questioned the call for a private contractor to be hired to create the new structure, saying he didn’t know how anyone would come up with a structure that would be fundamentally different.
“I really think we owe it to the citizens of Homer to agree on models well in advance and not be derailed by misinformation or the interests of a particular group,” he said.
Lewis then called for reconsideration of the resolution, bringing it back before the council in its currently amended form at the July 22 meeting, when the full council should be place.
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