Consultant advises increase for Liberty Lake sewer rates

The process of utility rate setting was as clear as mud after a consultant walked through more variables than a calculus equation during a Wednesday sewer district meeting.

What became abundantly clear, however, is that Liberty Lake homeowners and developers will pay more for sewer service.

Edward Cebron, a principal of Financial Consulting Solutions Group Inc., a firm that conducts studies that help utilities set rates, said he is recommending increases to defray costs of building and maintaining the $11 million sewer plant.

If the commissioners approve the increases, households will pay an additional $6.50 a month, starting in 2005. For the next three years, households will see and increase of $1 per month, or about $12 a year.

Liberty Lake Sewer and Water District hasn’t raised sewer rates since 1990.

The district’s sewer rates were the lowest among six Spokane and North Idaho utilities, ranging in size from the city of Spokane to Airway Heights, he said. The proposed increases would put rates into the midrange comparatively.

Hookup fees for new residential homes could increase from $3,700 to $4,552, making hookup charges the second highest among the cities.

Owners of dedicated capacity (capacity that was pre-paid and reserved in the original plant) would also pay toward plant upgrades.

Developers with dedicated capacity would pay $1,389 to access service inside district boundaries and $2,178 to tap into dedicated capacity outside boundaries.

“Growth pays for growth is the buzz word we hear and try to use,” Cebron told the group.

“We’re basically recommending a three-tier system that would be applied to new development.”

When a member of the audience asked about the district’s contractual obligations to honor dedicated capacity without additional charges, Cebron said, “The present plant would not be allowed to discharge into the Spokane River without the present upgrades.”

Ultimately, the consultant said, rates should proportionately reflect usage.

For example, if residual accounts create 80 percent of the billing expenses, then household rates should shoulder 80 percent of that cost.

Utility fees should support the current system, lay the foundation for the next 10 years of improvements and pay for debt load.

Because the district has good reserves, ratepayers will benefit from a public works trust fund loan with a one-half-percent interest rate, he said.

“These days it’s one of the closest things to grant programs that we have.”

When Mayor Steve Peterson asked about water charges, the consultant said that current rates are average.

However, he said, a study three years ago found that water rates could have been reduced by 10 to 15 percent.

At the time, commissioners chose to keep rates constant to encourage water conservation, an ongoing issue because Liberty Lake has limited water rights and brisk development.

The result of larger-than-average water bills is a surplus that’s applicable toward future water system upgrades, he said.