Chairman Ben Levie called the regular meeting of the Utility Board to order at 7:07 p.m. in the Council Chambers at City Hall, 9611 SE 36th Street, Mercer Island, WA.
Ben Levie, Vice Chair, Kwan Wong, Tim O’Connell, Steve Milton, Susan Kaltenbach and Wendy Weiker were present. Tana Senn and Glynda Steiner were absent.
Staff: Francie Lake, Glenn Boettcher, Terry Smith and Asea Sandine were present.
Motion: Moved by O’Connell, seconded by Milton, to approve the minutes of September 10, 2013. The motion carried unanimously.
Lake provided a high level overview outlining two water rate scenarios A and B. Lake advised that the 2014 Water rate study had been updated from last year’s study to reflect actual revenues and expenditures for 2012, the sale of the First Hill property for $1.9 million, additional net income from higher water use due to the dry summer of 2013, and the settlement payment to SPU for unmetered water use in 2009-2011. Scenario A demonstrated the same rate increase anticipated by Council (3.55%) for 2014. And it also forecasts rate increases of 10.2% for 2015-2018. Scenario B smoothes the rate increase over 5 years at 8%.
Motion: Moved by Milton, seconded by Kaltenbach, to approve water rate scenario A (3.55%). Motion failed 2-4 (Milton and Kaltenbach assented).
Motion: Moved by Wong, seconded by Levie, to approve water rate scenario B (8%). Motion passed 4-2 (Milton and Kaltenbach dissented).
Lake provided a high level overview outlining three sewer rate scenarios: A, B and C for the Utility Board’s consideration. Lake advised that the 2014 Sewer rate study had been updated from last year’s study to reflect actual revenues and expenditures for 2012 and the carryover of two capital projects from 2012 to 2013. In addition, Lake advised that staff saw a declining winter water use pattern (the use on which single family customers are charged for sewer) and attempted to find a way to mitigate the impact on rates by looking at modifying the rate structure to include a minimum charge.
Scenario A) reflects declining winter water use, but maintains the current rate structure and the rate increase (6%) anticipated by Council for 2014, and forecasts increases in 2015 (15%) and 2016-2018 (8.7%). Scenario A also assumes dipping into reserves for four years.
Both scenarios B and C incorporate a rate structure change where a minimum average winter water use for single family customers would be set at 6 ccf (the current rate structure does not set a minimum). Setting a minimum charge recognizes that the sewer system is maintained and available for all customers. Scenario B) maintains the rate increase (6%) anticipated by Council for 2014, but forecasts an increase of 12% for 2015 and increases of 8.0% for 2016-2018. Scenario C) smoothes the needed rate increases over all 5 years (2014-2015) at 8.5%.
Motion: Moved by O’Connell, seconded by Kaltenbach, to approve sewer rate scenario B. Motion failed 2-4 (O’Connell and Kaltenbach assented).
Motion: Moved by Milton, seconded by Wong to approve sewer scenario C (8.5%). Motion passed 4-2. (O’Connell and Kaltenbach dissented).
Motion: Moved by O’Connell, seconded by Milton to impose a sewer minimum charge of 6ccf for all single family. The motion carried unanimously.
Next Meeting: The next scheduled meeting is January 14, 2014.