Puyallup considers hiking utility bills to upgrade aging systems. Here are the options
Preliminary results from a recent Puyallup utility rate study suggest that residents might see a hike in their utility bills in the coming years.
Cities conduct such studies periodically to see if residents are paying the amount needed to cover the city’s expenses. The study analyzed the city’s water, sewer and stormwater rates as well as three options that could be considered down the line.
The preliminary results were shown during a Nov. 9 city council meeting. Councilmembers did not take a vote or final action.
“It’s something that we try to do about every 10 years, but it’s like all other studies and updates and plans — it’s just hard to get to it because it’s pretty complicated analysis,” city engineer Hans Hunger told The News Tribune.
As of February 2021, an average resident pays about $45.95 for water, $105.61 for sewer and $26.35 for stormwater, according to the city’s fact sheet. Including a $3.63 landfill fee, residents pay a total of $181.54 on a bimonthly basis (every other month).
The three options the council heard include raising utility rates to cover the cost of improvements to the city’s aging utility systems, raising rates less and using a loan to cover the difference to do those improvements, or raising utility rates minimally just to keep up with inflation, Hunger said.
The first option would allow the city to use the money collected to fund all capital improvement needs, Shawn Koorn, associate vice president for HDR Engineering, Inc, said during the council meeting. That’s the firm that did the study for the city.
Beginning 2023, the first option would require residents to pay $79.85 for water, $141.38 for sewer and $43.81 for stormwater, according to Koorn’s presentation to the council. This totals $268.67, including the landfill fee. That means the bimonthly cost for the average homeowner would go up $87.13.
Through the second option, the city would issue long-term debt in 2023 to fund a portion of capital improvement needs while still raising utility rates somewhat. An average resident would pay $64.12 for water, $137.45 for sewer and $32.09 for stormwater, according to Koorn’s presentation to the council. This totals $237.29, including the landfill fee. That means the bimonthly cost for the average homeowner would go up $55.75.
The third option, on the other hand, would require residents to pay $60.33 for water, $135.48 for sewer and $28.88 for stormwater, according to Koorn’s presentation to the council. This totals $228.32, including the landfill fee. That means the bimonthly cost for the average homeowner would go up $46.78.
The third option is just “keeping the status quo” Hunger said, which would not garner enough funds for the capital improvements.
If the council chooses the second or third option, the city would still be below the region’s average utility rate. If the council chooses the first option, it would be slightly above the region’s average, close to Tacoma and Sumner’s range.
Hunger said Puyallup’s current practice is to raise rates gradually over time with annual adjustments tied to the construction cost index. Adjusting utility rates is a complicated decision, he said, so it takes the larger utility rate study to give the council enough information to deviate from the existing policy.
Aging systems
Over 18 percent or 37 miles of water pipes need to be replaced over the next 30 years, Koorn said. Some reservoirs also need to be recoated and other capital improvement projects must be done to maintain water systems.
About 35 miles or one-third of the city’s sewer system is as old as 1954 and older, Koorn said. About two-thirds are as old as 1974, with some that are newer. Most pipes need to be replaced as some of them are “two-thirds of the way through their useful life,” he said.
Some parts of the city’s stormwater system also need to be improved and replaced, Koorn said. About 12 miles worth of pipes are undersized and aged, and work needs to be done to meet state permit regulations.
The study also found that the city does not have enough funds in its capital reserves to do all the upgrades that are needed, Hunger said. The city operates on a “cash-as-you-go” system, paying for projects when arise unexpectedly, but Hunger noted it’s more expensive to fix a series of utility emergencies resulting from aging infrastructure than to get ahead of those problems by updating the systems.
“A lot of times what happens is projects that we’re wanting to get done, get delayed because we got to build up enough money to be able to implement them,” Hunger said.
Hunger said plans and considerations regarding the city’s utility rates will be brought back to the council in early 2022. Changes to utility bills would not take effect until 2023, he said.
This story was originally published November 19, 2021 at 5:00 AM.
