By Kristine Thomas
Since October the Mt. Angel City Council has postponed taking action on resolutions to increase water and sewer rates twice. At its January meeting, the third opportunity to review the issue, a motion to approve the proposed 3 percent rate increase died on a two for, two against vote, with one abstention and the mayor declining to break the tie.
Councilors Mike Donohue and Andy Otte voted in favor, Councilors Ray Eder and Kelly Grassman voted against and Councilor Darren Beyer abstained.
Beyer said he didn’t feel comfortable voting on the resolution because he wasn’t familiar with the information.
In the event of a tie, the mayor has the option to cast the deciding vote. In this case, Mayor Rick Schiedler chose to allow the motion to die without comment.
As part of the original background material on the issue, Finance Director Tracy Grambusch gave councilors and council candidates a list of water and sewer maintenance and capital projects that need to be done and described how the increase could help pay for them.
The projects include replacing the remainder of the water line on Elm Street, installing new three-part flow fire hydrants, putting money aside for capital improvement projects for the water plant, replacing or repairing the generator at the sewer plant and setting aside funds for sludge management.
A 3 percent hike in sewer rates for Mt. Angel households would increase sewer bills from $35 a month to $37.50 – an 8 cents a day, $2.50 monthly or $30 yearly increase.
Water rates would climb from $1.85 per cubic foot of water used, to $1.90 per cubic foot, and the water meter rates would go from $10.50 for a ¾-inch meter to $10.82 a month.
A 3 percent increase for sewer rates would equate to an estimated $47,654 in annual additional revenue. A 3 percent increase in water rates would generate an additional $14,362. The money from these increases would be set aside to pay for future or emergency sewer or water projects.
For example, if the Department of Environmental Quality were to determine the city’s sludge ponds were failing and require immediately repairs, Grambusch said the city would most likely to have to obtain a loan if it did not have adequate funds on hand. In such a circumstance the city might also be cited by DEQ, which could impose penalties.
Given the city’s current ratio of debt to income, City Administrator Jim Hunt said it’s unlikely the city would qualify for a loan, or if it did, it could be charged high interest rates. The lender could make it a condition of the loan that the city raise sewer rates, and could even determine the amount of rate increase, Hunt said.
Just like a family needs to save for unforeseen circumstances, the city needs the set aside money, Hunt explained after the meeting, adding he would rather see the city pay for maintenance on a scheduled basis than be faced with a crisis and incur substantially higher costs.
“It generally is the practice of a city to set money aside for maintenance and capital projects,” Grambusch said. “We believe we need to be fiscally responsible.”
“Citizens expect councilors to provide proper funding for operations. If they don’t, the state may intervene,” Hunt said.
As past of the original October packet, and in response to subsequent council questions, staff provided reports on why the rate increases are needed, how much the increase would cost citizens, how the money would be used, historic volumes used by the bottling company – which is no longer on city water, and the rates of cities of similar size.
Grambusch wrote in the October report that from discussions she had with Hunt, Public Works Superintendent Dan Bernt and Wastewater Operator Dennis Clary, “it is clear that costs for the city to maintain and run the water and sewer departments have increased in this last year and will continue to rise in the next year.”
At the December meeting, councilors unanimously agreed to have two resolutions – one for water rates and one for sewer – placed on the January agenda for a vote. At its January meeting, after letting the motion to approve die, the council voted to have Grambusch bring current budget figures to the March meeting along with the resolutions.
Grambusch said if the council were to approve both resolutions in March, users would see an increase in their sewer bill in April and an increase in their water bill in July. Hunt said he was concerned delay was resulting in the city losing months of additional revenue.
Council packets are public information and are made available to the councilors one week prior to each meeting. They also may be reviewed by the public and are available through City Hall.
