A 40 percent water rate increase is no longer being considered in Cannon Beach for next fiscal year.
The rate increase was proposed earlier this year to help finance the water and wastewater master plan that detailed about $3.4 million in water infrastructure and $1.3 million in wastewater projects. The projects would focus on rehabbing or replacing a variety of systems, including brittle water lines and water storage tanks.
But concerns from the public works committee about discrepancies within the rate study and disagreements about how certain projects were prioritized has made a substantial rate increase a problem.
Instead, the city will consider a 3 percent rate increase to cover normal operational costs, as well as transferring up to $250,000 and $275,525 for water and wastewater capital projects, according to a draft of the budget.
Public Works Director Dan Grassick said that any rate increase after this fiscal year will be considered after the public works committee finishes reviewing the master plans and rate structure, which would have increased water bills from about $52 a month to $70.
“That is a very complex and multifaceted discussion that will need to involve an in-depth and detailed discussion with the full council, and given this is Cannon Beach, with the greater residential and business community before any decisions about a potential rate increase are decided upon,” Grassick said in an email.
During a special meeting Tuesday, May 9, Grassick and members of the public works committee did find common ground on projects such as replacing brittle water lines, upgrading outdated pump stations and fixing sand filtration systems.
But there were clashes over the necessity and cost of a supervisory control and data acquisition system, called SCADA, that would automate data-point collection and give remote access to operators.
“I think we should be cautious and take slow steps into this instead of all at once,” committee member Les Wierson said.
Grassick reminded the committee to think of the plan more like a 20-year wish list to work off slowly. The advantage of a plan like this is so that when it is submitted to the state, there is evidence to say the city has a plan to solve a known problem, Grassick said. That in turn helps keep a city’s insurance rates low.
“You want to replace your system every 80 to 100 years,” Grassick said. “That is an industry goal. It’s about resiliency.”
While the committee agreed many of the projects were necessary, they didn’t feel comfortable recommending to City Council a rate increase that committee member Carolyn Propst said felt problematic.
“For the past four years, the average amount of water used per household has been 4,270 gallons. But in the rate study, it was based on 3,270 gallons,” she said. “Fundamental assumptions were not reconciled between actual usage and that is my main concern. How can the amount of water we use be that different from one year?”
The public works committee will now spend the next week preparing what they will recommend to the City Council to adopt at the next council meeting. But in the long term the committee will need to spend time reviewing priorities and looping back with consultants about alternatives, Grassick said.
“Those decisions will drive what rates may look like,” Grassick said.
Some on the committee believe that many of the projects included in the master plans should be paid for with a general obligation bond rather than revenue bonds from rates.
“GO bonds are something the people can vote for,” Wierson said. “And it’s the best way to have second-home owners pay their fair share.”
It’s a strategy that has worked in the past. In 2012 voters in Cannon Beach passed a bond to construct the wastewater treatment facility.