City begins water and wastewater rate study

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SANDPOINT — City officials began a rate study for its water and wastewater treatment systems as part of a move to ensure equitable rates.

At the Jan. 5 council meeting, Angie Sanchez-Virnoche, the vice president of Principal of Financial Consulting Solutions group, went into the details of the rate study. She had first presented to the council in October she outlined how the study would take place.

The study would include everything from sensitivities and priorities to fiscal policies, an assessment of revenue needs and an analysis of service costs as well as structure design. Lastly would be public education in order to foster an understanding with the community, said Sanchez-Virnoche.

Public education is a way to continue encouraging conversation, she said. The rate study would determine revenue necessary to meet all financial needs rather than looking to raise rates, but it would also determine if rates are set and the correct price in order to meet revenue sufficiency.

“We don’t automatically assume you need a rate adjustment. We are just evaluating how your rates are doing to your overall needs,” she said.

The city received a new discharge permit in December 2017 and, since then, has completed modest upgrades to improve level of treatment, said City Administrator Jennifer Stapleton. The new permit requires the city to meet or exceed what is required by the permit.

Stapleton said one of the first things city staff asked FCS to look into was the city’s rate structure since it is “very complicated” and “difficult to understand” especially for people with new service being hooked up.

From input received from staff and the public simplifying the rate would be helpful to remove errors and to bridge understanding amongst the public, said Stapleton.

Due to the conservation rate, rates go up in the summer months and members of the public are also unhappy with that, said Stapleton. It is uncertain if what was wanted from the conservation structure was achieved, she said.

“When we see such a significant jump in cost, it means people don’t want to water their lawns because the cost is so high and we’re in the middle of peak fire season,” she said.

“Our utility rates are notoriously high relative to the rest of the state and that’s for a couple of reasons,” said Mayor Shelby Rognstad.

Once the city entered into the workshop component, Rognstad said it is important to acknowledge that fact and address to the public that Sandpoint has clay-type soil which means they have high run-off events.

“And so we ended up building a wastewater treatment system that is far oversized to the size of our city. … In our water service we have duplicative service, in the lake plant and in the Sand Creek plant. A typical city our size would have one source,” he said.

Since both systems are surface water sources, they require higher levels of treatment than a deep well, said Rognstad.

“These factors drastically increase the cost of providing services for the city,” he said.

With all that said he asked that in the public workshops done by FCS that they provide comparative analysis of another city that they have served which is in a similar situation to Sandpoint. And so the public can understand where that high cost is coming from, he said.

Design of the project would be the first done by the city, Stapleton said. She said the city is following along with other jurisdictions across the state in adoption of design build because it can be faster and more cost effective in regards to water and wastewater treatment.

Sanchez-Virnoche said that a rate study would enable each utility to remain self-sufficient and self-report, as well as inform financial decisions and their impact on the city. A rate study would allow the city to develop a capital funding plan and evaluate need for external funding.

“It is a living and evolving plan to achieve long-term planning objectives,” said Sanchez-Virnoche.

FCS suggests a rate study every three to five years. Sandpoint’s last rate study was 10 years ago.

Stapleton said that there will be a series of public workshops and outreach in the spring. Information will be coming out in utility bills.