Lake Whatcom Water and Sewer District, formally known as Whatcom County Water District No. 10, has served the ratepayers of Sudden Valley, Geneva and the north shore of Lake Whatcom since it was created in 1968. We are a publicly owned municipal utility, providing both sewer collection and drinking water service to these communities.
Setting utility rates is a complex issue. In setting the rates, the district has to be financially responsible, making sure that sufficient revenues are collected to pay for the day-to-day operations of the district and to fund future infrastructure upgrades, repairs and replacements. A certain amount must also be kept in reserve for emergency contingencies. By state law, the district is not allowed to make a profit. Other than occasional grants or low-cost loans for specific projects, the district receives no outside funding; all costs are borne by our customers and all of the revenue needed to run the district comes from water and sewer rates and charges.
The district has a comprehensive sewer and water plan and a financial/rate study updated every five years. Financial Consulting Services Group, an independent consulting firm, has analyzed our current revenue and expenditures, capital improvement plans, debt commitments and other information needed to develop recommended rates for the next five year period beginning in January 2015. The district's board of commissioners reviewed the latest study and discussed policy concerns about the Lake Whatcom environmental issues, water conservation and the impact of rates on low-income customers. The ratepayers were notified of the proposed rate structure and given an opportunity to comment.
After reviewing the findings of the latest financial plan and rate study (which can be found at www.lwwsd.org) it was determined that overall rates needed to be increased in order to finance required capital improvements to the water and sewer systems over the next five years.
The board of commissioners proposes to create discounted water and sewer rates for qualified low-income senior and low-income disabled single-family residential customers. To encourage water conservation, the board is also proposing to create a "conservation block rate," where the volume rate is higher for people using more than 2,500 cubic feet bi-month (every two months). In addition, cost saving measures will be implemented in 2015 to reduce the district's operating budget by $50,000, which equates to about a 3 percent cut in water operating expenses.
There are only 4,000 water and sewer utility accounts within the district's boundaries and the only new customers are those building on existing platted lots (infilling). As a consequence, little revenue is being generated through new permits and connection fees to support required improvements. The district's user base is primarily residential, with very little commercial and no industrial facilities within its boundaries. The topography around Lake Whatcom also creates the need for more sewer pumping stations and water reservoirs than most of the surrounding utilities. The district will spend $3.3 million over the next five years to rebuild five sewer pump stations; $1 million to build a new water reservoir and $2.5 million to replace old water mains. In addition, $1 million will be used to repair and seismically upgrade two existing water reservoirs. Finally, the district pumps all of its collected wastewater to the city of Bellingham for treatment and will soon begin paying its 4.8 percent share, or $2.5 million, of recent water quality improvements to the city's Post Point Wastewater Treatment Plant. All of these circumstances add to the cost of providing water and sewer service.
A final important consideration in the district's unique operating environment is the condition of Lake Whatcom. Because the city, the district, and the county have an interest in keeping the largest single source for drinking water in Whatcom County clean and safe, the district entered into an inter-local agreement in 1998 known as the Lake Whatcom Management Program in order to protect the water quality within Lake Whatcom. This agreement created an arrangement in which the district contributes financial resources in order to protect both the drinking water and aquatic environment of Lake Whatcom. The cost of the district's contribution will likely increase as we move forward with implementation of the management program.
ABOUT THE AUTHOR
Patrick Sorensen is general manager of the Lake Whatcom Water and Sewer District.