GRANGEVILLE Figuring out what the city will charge users for its fees can be a confusing, complex formula with an alphabet soup of acronyms. As well, it involves the entirety of public utility issues imaginable from existing water capacity, needed repairs, wastewater plant chemistry, federally mandated upgrades and essential public safety concerns.
“And then you try to explain it to the people paying the bills,” said Grangeville public works director Jeff McFrederick, “and they look at you like you’re full of it.”
“That’s why we want to be exacting so everything is understandable,” continued Brad Watson, P.E., project manager with J-U-B Engineering, Inc. “It’s why we want whatever is presented to be defendable and explainable; that’s my goal.”
But it was a meeting where presenters and city government officials outnumbered the six members of the public in attendance at the Soltman Center last Tuesday, Feb. 27, for an hour-long J-U-B presentation on how and why the municipality charges what it does for utility fees, including the equity buy-in, which was an issue in last fall’s council elections.
This comes as the city is under way with a water system study, contracted to J-U-B, that will look at several factors – maintenance and operation, regulatory demands, projected growth, economic development, and aging infrastructure. This will provide an up-to-date view of the system – a requirement in seeking grant funding — that will help in planning for ongoing needs and future projects, as well as how to pay for them. Tentative plan completion is for this fall, during which more public input opportunities will be made available, and from which recommendations may be made on changes to existing utility fees. A subsequent sewer master plan is tentatively budgeted for next year.
“One of the goals with Wes [Lester, mayor] and I on this is more communication with the public and to try to have them understand where we’re coming from on our side,” McFrederick said. Lester later continued this thought, saying the presentation would also better inform council members.
“None of us are experts in this issue,” Lester said, so the council needs the best information it can get to inform its decision-making. In looking at past decisions, he said he’s had a problem, for example, with recommendations for fees that were arbitrarily halved by the council. “We spend all that money to have a plan done and we’re picking a number out of the air…. If we’re not going to go by recommendation, then we’re just winging it, and I don’t think that’s the right thing to do. But that’s ultimately the council’s decision.”
Watson explained fees and rates should reflect the true costs of service, which include operations and maintenance, administration, depreciation (“Some cities don’t fund for depreciation,” he said, which he said is a mistake that hampers funding for repairs and replacement).
“User rates don’t normally cover capital improvements for growth and expansion,” Watson said, those later he clarified this is not black and white as some projects – depending on their multiple categories of needs — may allow for intermingling of both user and buy-in fees. Of those buy-in fees, “Those are a one-time charge to a new customer,” he said. “You are buying your portion of the system that has been built for you…. They are just to replace the capacity lost in the system when somebody hooks up.”
Why are these buy-in fees important? “For wastewater treatment plants, or wells or reservoirs,” Watson explained, you can’t just replace that capacity overnight. It takes time. You’ve got to build it.”
Presenters explained the city currently uses its user fees for all these needs, building its reserve fund to plan for future projects, and that buy-in fees are currently not a factor in that funding equation.
But the costs of those buy-in fees — $1,540 for water and $2,860 for sewer — are what some have taken issue with, such as real estate agent Earl Musick (who ran unsuccessfully for council last fall) and business owner Ted Lindsley, both of Grangeville, who attended last week’s presentation. Concern is buy-in fees have discouraged growth for needed housing, and the amounts charged are not realistic for rural areas.
Lindsley has been a vocal critic on the buy-ins through the election and at council meetings. Last Tuesday, he reiterated his argument that encouraging more development – such as adding on a 15-unit apartment complex – “generates customers for life and you get those fees every month.”
A dilemma for the council, according to Lester, is being caught between contractors who want fees raised for everyone, “and the public is saying, ‘If they want to build stuff, let them pay for it.’”
“I don’t believe anyone thinks they should hook in for free, but selling one or two a year, what money is that generating?” Musick said. “I’m not saying this is the only problem building here, but this is just one more straw; another issue just to build a house, an apartment complex, a restaurant, an office. We can’t put everything on new building, and we can’t put everything on people already here.”
Lester questioned the ER (equivalent residence) used in calculating buy-ins, noting the obvious difference in usages, for example, between a one-bedroom apartment and a house, yet they are charged the same ER. McFrederick said this being looked at as to whether those can be revised, “make each one fair for everybody and still get what we need,” and perhaps deferring fees to make the process more development-friendly. On a related funding issue, McFrederick said a businessman suggested to him the council add a dollar for all users to help fund costs, the consistency of which he questioned would adequately meet city needs: “If we don’t stay consistent, we get farther behind, and one big project and our money is gone.”
“If we add a dollar to every citizen that pays a bill here, we’d be going in the right direction it sounds like to me,” Lindsley said. “We’re sitting her whining and moaning about hookup fees that aren’t doing anything.”
Timetable for the water study is four to six months to gather information, with reports to the council on progress, and subsequent presentation of findings and recommendations.
“I just tell you the numbers we recommend. I don’t tell you what you should do; that’s a policy decision,” Watson said, based on the city’s legal and financial counsels, and the community.
That policy will be determined by the council, McFrederick said, “and we just have to zero in and be as fair to everyone as we can, and still get what we need and move forward.”