Council at impasse over water rates

Even with the successful conclusion of a thorough vetting of the Capital Improvement Plan (CIP) by the recently concluded technical advisory committee, the Sisters City Council finds itself unable to reach agreement on a conceptual approach to the city's water system as a business enterprise.

"We have tried for two years now (to raise rates) and haven't come up with a consensus yet," lamented Councilor Pat Thompson.

Councilor David Asson crafted a detailed financial model of the city's water enterprise system, which he presented at last Thursday's council workshop. Despite considerable give-and-take on the issue, the council could not agree on several "what-if" points in Asson's model.

As a compromise fall-back, there appeared to be agreement on making the current rates, including the temporary four percent increase, continue for another year. The water rates for the balance of this year must be set at the November 10 council meeting since the temporary rates expire on November 30.

The council found unanimous agreement on four basic concepts as laid out by Asson: equity, conservation, stability and affordability. Councilor Thompson's view seemed to best summarize the split of opinion on the approach to fulfilling those concepts. Thompson has spoken frequently of the need for the council to "live within our means." He has also campaigned for a two-tiered water rate made up of a fixed (overhead) and variable (usage) charges.

Speaking to Asson's model, which takes the base usage allowance to zero, Thompson said, "I don't think going to zero addresses the equity issue at all. This is not a commodity that you go down to the corner store and buy. The cost of maintaining this fund is the cost of maintaining this infrastructure; it is not the cost of producing a gallon of water. Charging by the gallon is a just a tool to generate revenue. Equity is "what does it cost you to get that first gallon of water'."

Thompson challenged the current budgeted forecast on two levels.

"We have two options. We can raise rates or we can reduce expenses," said Thompson. Emphasizing his "living within our means" argument, he pointed out that the budgeted personnel and expense line items have increased even though water consumption and use of water have decreased.

Second, Thompson challenged the fact that when the refuse enterprise was outsourced to High Country Disposal many of the expenses were moved to the water enterprise fund, but none of the revenues were moved to the water fund. The revenues were moved to the general fund. He would like to see the water fund budgeted as a standalone enterprise, and only then determine what the water rates should be that will keep the water fund viable.

The councilors were unanimous in their praise for the quantity and quality of the work Asson put in to develop the real-time financial model for the water fund. If councilors could agree on what variables to use, the model could serve as a real-time tool for determining and adjusting water rates now and in the future.