Seattle Panel Trims Water-Rate Increase; Reservoir Covers Get Approved

Source: 
Seattle Times

For the second time in two weeks, a proposed water-rate increase affecting 1.3 million Seattle Public Utilities customers is growing more palatable.
Under a reduced rate package that cleared a key Seattle City Council panel, the overall rate increase would be 14.9 percent. Seattle Mayor Greg Nickels initially sought an increase of 20.7 percent over the next two years. That was cut to 17.5 percent earlier this month, after Seattle dropped out of a water-supply project with Tacoma, saving expenses.
In explaining a second trim, Margaret Pageler, chairwoman of the Water and Health Committee, said, "As we went through the components of the rate in committee we found places that looked like there were duplications."
Pageler declined to predict what the full council will do when it takes up the legislative package Aug. 12, but passage appears likely, given the panel's unanimous action and the council's traditional aversion to reversing committee decisions.
To make the additional cut, utility officials will have to pare $2 million off next year's $57.6 million operations budget, which still represents an increase from this year's $51.9 million. Utility officials were still crunching numbers yesterday and could not produce a dollar figure on how the proposed 14.9 percent rate increase would play out for typical residential and commercial customers.
When the rate impact for the typical residential customer (defined as one who uses 155 gallons a day) was recalculated under the 17.4 percent increase scenario, it meant a monthly jump of $3.72 to $22.86, effective Sept. 16, and an additional $1.40 starting in January 2004.
Those additions are on top of an increase in the "base service charge" on water bills — the amount people pay regardless of consumption — to $6.50 on Sept. 16, up from the current $4.10. That would go to $7 a month in 2004.
As a result of a cost-of-service study, the rate proposal has been designed to redistribute the share of revenues collected from commercial ratepayers and residential customers. Under the existing split, residential customers pay nearly 54 percent and commercial customers about 43 percent. By the end of 2004, the split would be nearly even.
The water-rate proposal directly affects 560,000 Seattle residents and 740,000 wholesale customers served by suburban utilities.
As part of the rate package, Pageler's committee approved legislation designed to broaden participation in the utility's low-income rate-assistance plan. Under the new criteria, households with an annual income that does not exceed 200 percent of the poverty level would be eligible; existing rules limit participants to 125 percent.
The panel also approved an ordinance to advance Nickels' plan to bury six reservoirs at a cost of $268 million. The legislation authorizes the utility to pursue the project, subject to funding and environmental reviews.
But it pushes back the project's completion date by nine years, from 2011 to 2020. Council members noted that last fall, when Nickels proposed the more ambitious timetable, officials were being very cautious as a result of the Sept. 11 terrorist attacks.
The panel also signaled its willingness to establish a rate-stabilization account as a hedge against weather conditions that affect water consumption and revenues. The plan is to set aside $2.5 million annually to ensure the utility can pay its debts.
But to guard against such an account becoming a slush fund, the measure requires the utility to regularly report to the council on the size of the fund and to seek the council's permission before it can access the account.
However, the panel did not pass the rate-stabilization legislation in the meeting because an ordinance may not be introduced and voted on in the same committee meeting. It will be referred to the full council next Monday and likely then be taken up with the rest of the rate package for final action Aug. 12.

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