Borough waits on metering residential water use
The Haines Borough Assembly on Tuesday passed an ordinance that changes residential water rates.
It does not include a previous proposal to move toward metering residential water customers following concerns that staff hasn’t done enough to investigate its costs and benefits.
An ordinance introduced in October would have required all residences built after Jan. 1 to be metered. The assembly voted recently to remove that clause following a recommendation by its Government Affairs and Services Committee to provide legal and financial justifications for the proposed changes.
At the committee’s direction, chief fiscal officer Jila Stuart contacted consulting firm the FCS Group and obtained a $17,000 quote for a rate study and revenue analysis.
The two steps, the study and analysis, would determine how much revenue the borough needs to generate to cover expenses related to providing water and sewer service. Then, it would determine whether flat or metered rates would work best for collecting that revenue.
“I don’t really like spending money, but I think we should do (both of them),” Stuart said. “I think it might be a good idea to do the study and have someone who is knowledgeable – who does this for a living – put the numbers together.”
Stuart said while the borough did commission a rate study in 2008 for $20,000 – also by the FCS Group – it didn’t take up the issue of metering. “It’s pretty stale,” Stuart said of the 2008 study.
Even if the assembly decides against moving toward metered residential service, the study would still be useful for setting future rates, Stuart said.
Assembly member George Campbell, who demanded a financial analysis before moving forward on metering, balked at the $17,000 price tag for the study at last week’s meeting. Campbell called the request for another study “frustrating” and “insane.”
“There needs to be a study done, but we don’t always have to bring consultants in to do a study. We can at least get in the ballpark with our own in-house people,” Campbell said.
Though the assembly didn’t approve or reject the study, Stuart said she is going to continue talking with public facilities director Carlos Jimenez and interim manager Julie Cozzi on the matter and ask that the study be included in the upcoming budget.
“I think the best thing to do is throw it in the pot with the other fiscal year 2015 things that are vying for funding,” Stuart said.
Currently, only businesses and commercial residential buildings like apartment complexes are metered for consumption. The borough bases charges on volumes used.
All other buildings – every residence minus about 60 homes in the Piedad Road area – are charged a flat rate, regardless of volume used.
According to Brandon Miller, a utility engineering analyst at the Regulatory Commission of Alaska, it is unusual for a small community like Haines to look toward metering residences.
“As far as I am aware, there are no utilities in Alaska with less than 1,000 connections/customers that charge water rates on a metered basis to residential customers,” Miller said.
Haines has about 665 customers, according to the Department of Environmental Conservation.
Miller said he could not say whether Haines would be better off with metered or flat rate services, though he advised the borough to consider benefits and costs before making a decision. Costs include buying and installing meters, maintaining them, reading them and replacing them. Benefits include water conservation and more equitable billing, based on use.
The assembly moved toward residential metering in fall 2012. The discussion arose after the private utility provider Crystal Cathedrals, which metered the 60 or so residences in the Piedad Road area, was taken over by the borough.
Stuart said it’s time for the assembly to make a decision.
“What I would like to see them do is get the study done, and either implement a plan for transitioning to residential meters or eliminate the meters we have now. Just go one way or another,” she said.
The ordinance approved Tuesday contains clauses that would eliminate the “vacated” rate, which allows customers to pay a reduced rate on their utilities when they are out of town or not living in a residence for extended periods.
It also creates a mechanism for property owners who pay to extend a water or sewer main down a street to be reimbursed by neighbors who hook up to the main during the ensuing 20 years.
The ordinance is set for a second public hearing at the assembly meeting Tuesday.