Bonney Lake residents should look out for higher water and sewer bills, starting in 2019.

During the Nov. 13 meeting, the Bonney Lake City Council approved new utility rates for the next five years in order to bring in enough revenue to tackle some $33 million in infrastructure and capital improvement projects, including increasing water storage and supply capabilities, continuing the city’s meter replacement program, improvements to sewer mains, and lift station pumping and storage capacity.

The new rates will start going into effect Jan. 1, 2019. Water rates will increase 8.5 percent every year until 2023, while sewer rates will jump 15 percent in 2019, 8 percent in 2020 and 2021, and then rise by the Seattle-area Consumer Price Index (expected to be around 2 or 3 percent) in 2022 and 2023.

In total, the average bill for water and sewer goes up 50 and 40 percent respectively by 2023, increasing the average monthly bill from $117 to around $161 or more, depending on if you live outside city limits or have a sewer grinder pump.

The news was not well received by some residents; three came to speak against the rate increases at the council meeting, while countless others took to social media.

One speaker, Kayla Hunter, said an unusually high water bill in the summer of 2017 “greatly impacted how I could provide for my family,” and told the story of a friend who had to take her family to the Sumner YMCA to shower for multiple days in order to avoid an explosive bill. “It’s ridiculous that families can’t afford to shower, water their grass, take care of a garden, or other things, because water rates here are already so high.”

Council members and Mayor Neil Johnson appeared sympathetic, noting the rate hikes affect them as much as anyone else in the city, but also added these rates are necessary in order to continue providing the current levels of water and sewer services to residents.

Councilman Justin Evans said the situation is “tragic,” putting some of the blame on the financial decisions of prior councils and administrations.

According to city documents, the 2012 council attempted to help residents out by cutting water rates by 19 percent to offset a 14 percent rise in sewer rates.

The 2008 recession also hurt the city by bringing development to a crawl, affecting utility revenue.

When developments connect to the city’s water and sewer utilities, they pay a one-time System Development Charge (SDC) that goes into the utility’s budget. According to city documents, the city saw anywhere between $1.5 million and $2.7 million in sewer SDCs, and between $2.7 and $6 million in water SDCs, come in per year between 2003 and 2007.

Comparatively, SDC revenue dropped to below a million for sewer SDCs per year and around $1.5 million per year for water SDCs between 2007 and 2011. In 2017, the city saw less than a million in both water and sewer SDCs flow into utility coffers, according to City Administrator John Vodopich.

Even Councilman Tom Watson, who has pushed against these rate increases ever since a rate study was presented to the council in spring 2017, admitted he would support the water rate increases, although the decision was difficult to come to.

“As a retired person on a fixed income, I have the same challenge as other people in the city,” he said.

Councilman Dan Swatman said while he approves of these rate increases, he wants to spend the next year looking at SDC fee rates and what the city calls a “utility tax” in order to bring down these rate increases in a future ordinance.

According to Chief Financial Officer Cherie Gibson, a utility tax is normally an additional fee passed along to residents in their bills. However, Bonney Lake chooses to tax itself instead of its residents, and takes that fee out of its utility funds to put into the general fund, she said.

The water rate increase ordinance was approved 6-0, with Councilman Terry Carter absent. The sewer rate increase ordinance passed 5-1, with Watson being the sole vote against.

A TWO-YEAR HISTORY

The process for setting these rates started in November 2016, when the council hired the Financial Consulting Services Group (FCSG) to perform a rate study and determine what new rates should be to cover those project costs.

FCSG returned April 2017 with a proposal that the council initially pushed back against — a total 54 percent increase in water and a 30 percent increase in sewer by 2022 for the average monthly bill (based on 7 centum cubic feet, or CCF, of water, or roughly 5,236 gallons). Instead of implementing the five year plan, the council voted in May 2017 to raise rates one time: 9 percent for water and 5.5 percent for sewer, starting June 2018. While the sewer rate ordinance passed unanimously, the water rate ordinance squeaked by with a 4-3 vote.

The debate was brought up again in September 2017. This time, the council discussed a total 22 percent increase for water rates and 25 percent increase for sewer rates through 2022 for the average monthly bill. Even so, some council members made it clear they believed the rate increases could be brought lower.

However, a vote was delayed when residents stormed the council in October 2017, complaining about outrageously high water bills despite the apparent lack of leaks.

City staff performed an internal audit, pulling 43 water meters suspected of misreading water consumption for independent testing. Kayla Hunter’s meter was one of those pulled.

“My water went up $500 with no change in my family size or watering of my lawn,” she told the council. “This summer, we did not even water our grass one bit, and my bill was still over $300.”

In January 2018, the investigation was completed and staff determined the meters were accurate. Many residents walked away unhappy, convinced there must have been a mistake somewhere in the city’s utility system.

Prompted by the many questions residents had about the water and sewer utilities, the city held an open house in March 2018. Experts from various firms gave presentations about how the utility systems worked, what shape they were in, why the rate increases are necessary, and what projects the new rates would fund.

Still, the council was undecided on how to move forward. RH2 Engineering, a consultant firm that has been working with Bonney Lake on its utilities for years, presented to the council in April 2018 a comprehensive capital improvement projects list, showing what projects absolutely had to be completed in the next five years, and which could be kicked further down the road.

With this information, FCSG returned to the council in August 2018 with new proposed rates — a total 22 percent increase in water rates and 31 percent increase in sewer rates for the average bill through 2023.

It appeared even council members who were searching for ways to lower those increases were convinced this was as low as they could go without putting their utilities in more financial danger. Still, the rates were sent back to the council’s Finance Committee for one last look.

But once there, it appeared there were some incorrect assumptions in FCSG’s financial model, and if the council had approved those rates, city staff said the city would have found itself in real hot water in the coming years.

Working with FCSG one more time, a final rate was presented to the council during an Oct. 30 special meeting — a total 50 percent increase in water rates and 40 percent increase in sewer rates for the average monthly bill by 2023.

COST COMPARISON AND NECESSARY PROJECTS

Back when FCSG proposed new utility rates in August 2018, they also presented a utility bill comparison of other local cities.

Out of the dozen cities picked by FCSG, including Enumclaw, Buckley, Sumner, and Auburn, only two cities — Puyallup and Fircrest — had average water bills that were less than Bonney Lake’s in 2018.

However, only Enumclaw’s average sewer bill was more expensive than Bonney Lake’s that same year.

After adding average water and sewer together, Enumclaw had the highest average bill in 2018, followed closely behind by Bonney Lake. However, with Enumclaw’s sewer rates dropping, and Bonney Lake’s water and sewer rates rising, Bonney Lake’s utilities will likely become the most expensive on the Plateau, let alone much of the surrounding area, in 2019.

Explaining why Bonney Lake’s sewer system is so expensive is difficult, the city’s Management Analyst and Executive Assistant Leslie Harris said in an email, because “there are many factors that contribute to the cost of maintaining and operating a sewer system.”

Former City Administrator Don Morrison said in a 2017 interview that the city’s topography is a key reason for why the city’s sewer rates are so high. Since Bonney Lake is so hilly, he said, the city needs more lift stations — which cost upwards of a million or more each to build, plus funds to operate — to get sewer down to Sumner for treatment.

Vodopich, who took over for Morrison early 2018, said the city has 25 lift stations and plans to build a 26th, as well as replace another lift station, which will cost $400,000 to design and another $1.5 million to construct.

In comparison, Enumclaw has 10 lift stations, Sumner uses 16, and Auburn — which has four times the population of Bonney Lake — operates 20 sewer lift stations and seven stormwater lift stations.

“We have over 93 miles of wastewater collection lines, 87 city-owned residential grinder pumps, and over 1,800 manholes,” Vodopich wrote in an email. “All of that infrastructure has to be maintained and replaced as needed so that most certainly contributes to the cost of sewer.”

Geoff Dillard of RH2 Engineering went into detail about those infrastructure needs during his April 2018 presentation to the council.

Bonney Lake has between 20 to 25 percent less water storage capacity as required by the Washington State Department of Health, he said. This can cause several problems for the city. For example, if Bonney Lake runs out of their own water supply, they have to buy extra water from Tacoma, although taxpayers don’t reimburse the city for that extra cost.

However, there are bigger dangers to not having enough water on hand, especially since wildfires have become more and more common during the summer months.

“You’ve been fortunate enough not to have a fire when the tanks are empty,” Dillard said. “You’ve had empty tanks, but you haven’t had a fire. So you’re just being lucky.”

Just upgrading water storage capacity is expected to cost $10 million alone, he added.

Over on the sewer side of things, Dillard said some of the sewer mains, like the one along state Route 410, are “running out of capacity.” This project, he added, has been put off by the city council for 10 years and is expected to cost $700,000.

Some of the city’s sewer lift stations, like the one Vodopich said is planning to be replaced, are also at capacity, Dillard said, and when lift stations continually operate at capacity, they wear out faster and fail without warning.

As an example, he told the story of a city that ignored a $50,000 project to a sewer lift station until it was too late. That city later lost a $1.5 million lawsuit because the lift station failed and damaged homes.