Water system needs revenue, expert says

If the city of Millwood doesn’t increase its water rates soon, officials fear the funds to manage its water system may soon run dry.

“If you continue the same spending patterns, I estimate you’ll be $340,000 in the hole,” said Andy O’Neill, rural development specialist from Rural Community Assistance Corp. He estimates the city will reach that point in 2016.

“You’re robbing from one fund to pay for it, so something is going to dry up at some point,” he said.

O’Neill’s comments came as part of his recommendation to Millwood City Council on Monday. The city hired O’Neill in September to evaluate its current utility rates in the face of rising equipment and maintenance costs, as well as a lack of required financial reserves.

To overcome the estimated budget shortfall in the city’s water fund, O’Neill proposed a gradual increase to the city’s base rate of $2 every year starting in 2013, along with a 25 cent increase to the commodity rate peaking at $1 for residential and 70 cents for commercial customers.

The commodity rate is the cost of water measured in gallon increments. Currently, Millwood residential rates are 20 cents for 748 gallons and 14 cents for commercial.

He further suggested the city could increase its revenue by simply restructuring the amount of water included in the plan for each household. Currently each household receives 4,000 cubic feet of water, equivalent to 30,000 gallons. O’Neill recommended reducing that to 2,000 cubic feet based on actual average household usage.

“That will get you out of the red,” O’Neill said about his overall proposal. “You’ll want to re-evaluate your rates in three years.”

Mayor Dan Mork said the council will consider O’Neill’s recommendation.

City Attorney Brian Werst updated council on the medical marijuana zoning moratorium. In September, the council approved a six-month moratorium on establishment and licensing of medical marijuana dispensaries and collective gardens.

With the moratorium expiring in March, Werst asked the council to schedule a public hearing at the next meeting to discuss extending it for another six months.

The moratorium allows the city time to research options on how collective gardens fit into zoning requirements.

Council members further heard the first reading of a proposed amendment outlining two changes to the budget.

The proposed changes include creating a new position of maintenance operator, to be filled by the current groundskeeper, and moving funds from the Real Estate Excise Tax fund to the general fund to buy a new lawnmower, estimated to cost $12,789.

The city is required to honor a five-day waiting period before final adoption, and the amendment requires a super-majority to pass. The council plans to vote on the amendment in March.

In other news, the council unanimously approved adopting a resolution outlining a new bidding and purchasing policy. Under the resolution, the mayor can approve purchases of supplies, materials and equipment up to $15,000 after receiving three quotes.

During the clerk/planning report, City Planner Tom Richardson reported that he is submitting a grant application to repair the Millwood City Park wading pool. His deadline to submit the grant to the Spokane Parks and Recreation Department is March 1. Richardson said more than $4,000 in donations have been raised to fix the pool.