Enterprise residents are nearing the end of their structured increases in water rates, but changes may be afoot with regard to sewer rates.
First the good news.
As part of its application for the $4.8 million to complete the 2014 water project (originally projected at $5.75 million), the city had to come up with a fee structure that would meet the estimated $186,000 per year debt service.
That fee structure called for a gradual increase in water fees from $26.40 monthly for users within city limits in July 2014 to $58.75 by July 2019.
It was a rate plan that sparked a recall campaign to replace the mayor and five city council members. In the end, no council members lost their positions, but rate increases remain a sore subject.
Nevertheless, the fee structure has proved to be adequate to meet costs, according to City Administrator Lacey McQuead.
“At this time, we do not have any plan to increase water rates beyond the scheduled increases, but that is all contingent on the budget and possible increased costs,” said McQuead.
Now the bad news.
The fee structure for sewer service for Enterprise has not proved to be as well structured. The wastewater system was completed in 2009, and several decisions made at that time have resulted in a system that consistently runs in the red.
No fee structure was put in place to address increased costs over time as was done with water.
One example of increased operational costs is the electric bill.
In 2008-2009, the city paid $12,000 for electrical power. In 2009-2010 power costs for the sewer system increased to around $37,000. By 2014 then city administrator Michelle Young reported that the electrical bill was more than $50,000 a year and the city was having to transfer from the sewer and water “sinking fund” approximately $90,000 to the sewer fund to balance the books.
Another problem that led to the shortfall was a change in billing structure.
Commercial units once paid the same rate as residential. However, in 2012 the rate structure changed and the city began charging by water usage, McQuead explained.
As a result, sewer revenues that were $902,021 in 2011-2012 dropped to $837,711 in 2012-2013.
For the past thee years, the amount the city has transferred to shore up the sewer budget has been $100,000 per year. That money is being taken from the sewer and water sinking fund. The sinking fund is a savings fund from which repair, replacement, upgrade, emergency and other costs can be taken.
Before transfers for the 2018-2019 fiscal year, the city had just above $1.5 million in its sinking fund, with approx. $755,100 allocated specifically for Debt Service Reserves.
Robbing Peter to pay Paul is not a strategy the city plans to continue.
“There were some changes made in 2017 after we reviewed the usage, so we are upwards of $900,000 again,” McQuead said.
A newly reorganized Public Works Committee is now looking into further ways to further address the shortfall.
REMAINING SEWER AND WATER DEBT
• Treatment Plant DEQ: $4,696,222 (Retires Sept.1, 2029)
• Treatment Plant Business Oregon: $408,688 (Retires Dec. 31, 2032)
• Water Improvements Community Bank: $237,565.06 (Retires Dec. 1, 2023)
• Water Improvements IFA: $4,608,979 (Retires Dec. 1, 2047)