University Place looks to sewer customers to balance city budget

The University Place City Council set in motion this week a sewer rate increase for some of its residents that will ultimately help balance the city’s budget.

The council narrowly approved a sewer franchise agreement with Pierce County in a 4-3 vote Monday. The agreement includes a 6 percent fee for the county’s use of city right of way for its sewer utilities.

That fee is expected to be passed on to UP residents who receive bills from Pierce County for sewer service. Mayor Javier Figueroa said the fee is expected to cost a sewer customer $32.40 a year. Residents with septic systems would not pay.

Karl Imlig, acting sewer division manager for Pierce County, said in an email Tuesday if the County Council approves the agreement “the county is not absorbing the cost.”

“Overall it does mean that sewer customers in University Place will pay more,” Imlig wrote.

The fee is expected to generate an additional $300,000 a year for the city. The money has been earmarked for the city’s street fund and will help fill a projected $1 million budget deficit.

Councilmen Ken Grassi, Steve Worthington and Chris Nye voted against the agreement.

They said it felt like the council was circumventing the public process by approving the fee.

“This almost feels like a ‘gotcha’ to the voters,” Councilman Ken Grassi said. “They said ‘We don’t want more taxes.’ ”

Grassi cited two recent failed attempts to raise taxes by public vote.

Last month voters rejected a resident-led effort to form a new taxing district to pay for recreation programs. In 2014, voters rejected a city-led effort to increase utility taxes to maintain and hire police officers.

Nye said he wouldn’t support the agreement “until we figure out the big picture of what it’s going to take to run our city.”

Council members Kent Keel, Caroline Belleci, Denise McCluskey and Mayor Javier Figueroa supported the agreement.

“We have to live within the revenues that we have. One of those revenue sources is this franchise fee,” Belleci said.

Keel said the city isn’t imposing a tax on its residents.

“It’s very clear in my mind that this is a fee from us to the utility. Period,” he said. “Will they pass it along? Probably.”

Approval of the franchise agreement was the last piece of a plan city finance officials proposed to shore up the budget.

The council previously agreed to cut its recreation programs, saving $400,000 annually.

That cut, combined with an anticipated $300,000 in revenue from a $20 car tab renewal fee and the $300,000 from the sewer franchise fee, is expected to help fill anticipated budget shortfalls over the next decade, according to Eric Faison, executive director for administrative services and interim finance director.

“We’re finally in a position where we can actually say to our residents that we have a balanced budget and we are not seeking additional funding,” Faison said. “We are going to make do with what we have.”

Pierce County is the only utility in UP that uses city right of way without an agreement, according to UP City Attorney Steve Victor. Approving the agreement creates equity among utility companies, he said.

The agreement, which was negotiated by city and county staff, now goes to the County Council. It would go into effect five days after county approval.

This story was originally published May 17, 2016 at 3:19 PM with the headline "University Place looks to sewer customers to balance city budget."