POULSBO — Poulsbo’s City Council got some hard numbers Nov. 5 on where water rates could go.
A water rate study performed by Gray & Osborne suggests two rate hikes: in connection fees and in rates for water use.
In short, the proposed connection fee hike is $1,750, bringing it to a total of $4,227. A 13 percent, or $1.63, raise in base water rates is also proposed, bringing that rate to $14.13.
City Engineer Andrzej Kasiniak presented the water rate study to the council, which in turn approved a public hearing to further discuss the matter on Dec. 3. Approval or denial of the rates will take place after that.
“We have done very good with our water conservation,” Kasiniak said. “We are saving our resources, on the other hand, our revenue was reduced by 18 percent. That is one reason why we are proposing an increase of the water rates today.”
The first part of the study considered connection fees for new development in Poulsbo. After calculating an appropriate raise, Gray & Osborne came up with a new connection fee of $4,227.
The new figure brings Poulsbo closer to that of neighboring communities. Port Orchard’s connection fee is $4,769. Silverdale’s is $4,900, and the Kitsap Public Utility District has a fee of $5,975. Poulsbo’s is still above Bainbridge Island’s at $2,754 and Bremerton’s at $2,511.
The base water rate was another part of the study, and resulted in the proposed 13 percent raise. Poulsbo’s current rate is $12.50. Adding 13 percent would bring it up to $14.13.
Kasiniak presented a little math with the proposal. The average customer with a consumption of 700 cubic feet of water would see a total increase of 6.5 percent on their monthly water bill. That breaks down to the average monthly bill of $26.08 going up to $27.98.
It leaves Poulsbo still under the rates of neighboring utilities. The Kitsap Public Utility District’s average monthly bill is $31.09; Silverdale’s is $34.70.
But it wasn’t all rate hikes that resulted from the study. Alteration to the city’s discount for low-income residents, low-income senior citizens, and customers with disabilities are also part of the discussion. Currently, only 10 customers of Poulsbo’s water utility take advantage of the discount. Kasiniak thinks there are more customers that could use it; he estimated 200.
Currently, to qualify for the discount, a person must be 65 or older, have an income that does not exceed 125 percent of the poverty threshold, or have a disability as defined by state or federal programs. The customers receive 15 percent off their water bill’s commodity charge.
Kasiniak suggested raising that discount to 30 percent and opening the discount to senior citizens in general and people earning less than $30,000 per year. Kasiniak then furthered the case for the water rate hikes.
The utility’s revenue is on the decline. Net revenue has dropped from $141,996 in 2009 to $125,026 in 2010 to $15,532 in 2011 and minus $555 in 2012. In 2013, net revenue shot up to $77,990. Despite the recent rise, Kasiniak said the city needs to be prepared.
Kasiniak compared the modern city to a Poulsbo of the past. Twenty years ago, the city had 30 miles of water mains for a population of 5,415. The city staffed the utility with four full-time equivalent employees. Today, Poulsbo has 63 miles of water mains for a population of 9,800 and growing. It is staffed at 2.5 FTE. Kasiniak asked that the city fund a higher level of FTEs to work on the utility.
“Eventually it will catch up to us,” Kasiniak said. “That is why we are asking to bring up the level of FTEs.”
