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Don't punish people who save water

Perhaps you are a Milwaukie water and sewer customer noticing a big increase in your bill?

As noted in the newsletter included with the bill, sewer rates have gone up for those who use 600 cubic feet of water a month or less. Don’t worry - it’s not due to a leak you need to fix, nor do you need to install a low-flow toilet to better manage your bill - both of which have been recommended by the city for years as ways for people to manage their sewer costs. It just means that since you are a lower user of the system, you are being required to pay more. In fact, the lowest users are seeing their sewer rates more than double. The rate plan chosen by Milwaukie hits those 25 percent who use the least water every month with the greatest rate increases. But it’s OK because everyone is paying their fair share, right? Actually not. Almost one-third of the residential users (32 percent), those using the highest volume, and therefore putting the most into the sewer system, are in fact now paying less.

It didn’t — and doesn’t — have to be this way. This was a conscious decision of the Milwaukie City Council, even though an alternate rate plan was presented to them that would have spread the increase more equitably across residential ratepayers. The alternate plan was developed by the city’s rate analyst consultant and the city’s finance director, who worked with me when I was challenged by one of the city councilmen to come up with a more equitable rate structure. Even after it was presented by the city’s own staff, the council stated that there was not enough time to review it. This is puzzling to me since I addressed the inequity of the rate structure on lower volume users at the point it was first publicly presented in early December, at which time City Council delayed the vote, supposedly to try to work something out.

You might like to know that the alternate, more equitable, plan uses a common methodology within the utility rate-setting field, which is to include a small base amount within the flat rate, which will moderate flat-rate impacts across user classes. This alternative was, however, opposed by the council because it was never raised at the Citizen’s Utility Advisory Board (CUAB). It does no good at this point to wonder why this option was not raised earlier, but it can still be adopted. I note that one of the CUAB members actually told me by email that he felt all the lower users had just been getting a break all those years because the system was “out of whack up till now.” This comment implies that all of us who have tried to moderate our water use, for conservation reasons as well as to lower our sewer bills, have just been freeloading, a point with which I obviously disagree. This doesn’t strike me as the position of someone concerned about the equity issues within the residential class.

The city has heralded this rate increase as justified because it achieves equity between classes. I suspect most people don’t know what that means. It means that residential customers (91 percent of the ratepayers) will now pay more as a class compared to business customers - based on volume usage between the two classes. There may now be greater equity between the business and residential classes, but this rate plan imposes significant inequity on small user residential accounts compared to large user residential accounts. In its Dec. 18 meeting, the City Council refused to consider an alternate plan which would have included a base rate of 200 cubic feet within the flat rate, stating that although they recognized the rate increase hit the low water users hardest, they felt that they had to adopt a rate structure that took no consideration of flow rates for residents. They took this position even though they used that same methodology to reduce the amount the business class as a whole will pay for sewer treatment.

So these are the facts.

1. The city of Milwaukie imposed a sewer rate increase which has two impacts. First it lowers the total costs paid by business and raises the total cost paid by residents. And second, it imposes a very high flat rate on residential customers (highest bill in Clackamas County, where rates range from $21.22 to $38 with Milwaukie at $40.76). The flat residential rate hits the lowest residential users of the system with huge increases, while high users get an actual reduction in their sewer bills.

2. A fiscally responsible alternate billing structure that would spread the residential increases more equitably was considered and rejected.

3. Low water users, we know from demographics, are most likely to be those who live alone, many of whom are elderly, are women, who historically have fewer retirement resources, and those most likely to be on a fixed income.

4. I requested that if the city imposed this rate structure, it publicize its low income assistance program, so that low water users for whom this rate increase takes a large share of their monthly income, would be made aware that they can apply for rate relief. Given Milwaukie’s demographics, this may involve a lot of people. No such outreach was conducted with this bill.

5. City Council can still adjust this rate methodology to be more equitable to lower volume users—if they don’t, the inequity will continue to recur month after month after month.

Two of the current councilmen had yet to take office when this decision was made, one of whom spoke in favor of the alternate plan. Two of the returning councilmen seemed open to reconsidering the issue. One of the CUAB members present for the vote expressed interest in considering the alternate methodology, which had never been presented to CUAB, even though, as I noted previously, it is a well-known methodology in the rate-setting community for applying a flat rate that makes some accommodation for lower end users.

Leslie Schockner is a former member of the Milwaukie Budget Committee.



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