Palmer City Council OKs water, sewer rate hikes

Oct. 1, 2006

By LEILA KHEIRY

Frontiersman

Residents of Palmer will see a jump in their water bills starting Nov. 1, the first of a three-tiered rate increase approved by the Palmer City Council on Tuesday.

The rate increase has been on the table for consideration since July, after Anchorage consulting firm Honchen & Uhlenkott Inc., determined through a study that the city's water utilities were operating at a deficit of more than $160,000. For sewer utilities, the revenue deficit was more than $251,000. The consultants recommended a 19.4 percent rate increase for water, with a 46.2 percent increase for city sewer customers.

The council initially had considered a two-pronged rate hike, but council members decided to lessen the sticker shock by breaking the increase into thirds. The council also had city staff look into a reduced rate for customers who use significantly less than the 5,000-gallon per month base level.

However, City Manager Tom Healy said Tuesday that the fixed costs to provide service to each home is the bulk of the bill for customers who use up to 5,000 gallons. The variable costs - those that are related directly to how much water is consumed - would not be much less per month for those who use up to 2,500 gallons, for example.

The council voted 6-1 to approve the rate increase. Council member Brad Hanson cast the dissenting vote, and argued that the utility's reserves are too high and the city is not managing that account properly. He said he doesn't think the full rate increase, as proposed, is needed.

Council member Jim Wood said the three-tiered increase would give the city the opportunity to see the effect of a partial rate increase, and if it's enough, then the other hikes wouldn't be necessary. However, he said some increase is needed.

&#8220I don't think it's that much to ask citizens to pay us out of the deficit we would be facing,” he said.

Council member Tony Pippel said even the full 19 percent increase for water rates is reasonable, because it has been a decade since the city last

adjusted its water utility fees.

Also on Tuesday, the council postponed a decision on a special rental agreement with the Palmer Arts Council for use of the Palmer Depot.

Mayor John Combs suggested a special arrangement for all regular Depot users. His idea was to allow those users to put one full rental payment on deposit, and then pay for each event after the event takes place. If, at the end of the year, the deposit is not needed to cover delinquent payments, it would be returned to the group or the group could use it to pay for its final event.

There was some confusion over the amendment, and over the actual rental costs at the Depot now. The council voted 5-2 to delay a vote on the matter, with Combs and council member Kathrine Vanover voting against the delay.

The next Palmer City Council meeting is Oct. 9. During that special meeting, the council is scheduled to certify the results of the Oct. 3 election and elect officers.

The next regular meeting is Oct. 10.

Contact Leila Kheiry at 352-2270 or at leila.kheiry@

frontiersman.com