Road, water, sewer price lower

The proposed Infrastructure Sustainability Plan still would sharply raise utility bills.

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WALLA WALLA — City officials said they restructured a plan to increase utility rates as part of the Infrastructure Sustainability Plan, dropping their projected 2015 monthly utility bill from $165 to $142.

But even though the overall bill might be less, water and sewer rates would still go up by roughly 50 percent if the City Council signs off on the plan. And in the case of water, the new rate structure is higher than what was previously proposed.

Public Works Director Craig Sivley said the overall savings with the new proposal came by recalculating inflationary costs, the removal of unjustified construction projects and lengthening the 70-year replacement schedule.

Sivley said his department had originally calculated inflation through 2015 at 5 percent per year; his department has since dropped that rate to zero for 2010 and 3 percent for subsequent years.

In addition, several municipal projects, including public bathrooms and lawn irrigation projects, were eliminated from the plan.

To further cut costs, the plan — which had proposed replacing all city water and sewer pipes and roads over the next 70 years — has been extended to a 93-year replacement schedule.

But even though the city was able to rework the numbers to lower the projected monthly utility bills, sewer and water rates vary little between both proposals. And, in fact, water rates will be $2.71 more per month than what was previously project for 2015.

The payoff with the new rate structure, Sivley explained, is that customers will see lower rate increases in 2011 and 2012, and work will being sooner and to a much greater extent than what was previously proposed.

"What is different is that we will build a mile-and-a-half of infrastructure every year beginning next year," Sivley said, noting that the previous plan had construction beginning in 2011 with just under a half-mile of work.

As for rate increases, the original plan called for 15 percent overall increase to utility bills in 2010 and 14 percent in 2011. The new proposal calls for a 10 percent increase in 2010 and nine percent in 2012.

Sivley explained that the reason the city can do more work up front and reduce its rate increase is because it will fund the first several years of the plan with low-interest federal loans.

The city will seek $18 million in low-interest bonds with interest rates of 3.2 percent to be paid off over 10 years. Those bonds would incur just over $4 million in interest. What that means to ratepayers is that $3.28 of their monthly bill for the next 10 years would go to paying off the bonds, he said.

Sivley also noted that there are advantages to applying for the low-interest loans now, rather than trying to bank money and begin full-scale replacement work in 2015, as previously proposed.

"There is an added incentive to getting the work done while the economy is down," he said, noting that construction costs are also down. "And there is the advantage of getting work for people here in Walla Walla."

Sivley also noted that the entire scope of Infrastructure Sustainability Plan construction for each year would be broken down into smaller projects to help local contractors qualify.

"We want to keep these small in size so that local general contractors that have a bond limit can apply for them," he said.

The plan was originally proposed in September to provide a way to fund the replacement of 140 miles of city pipes and roads. According to the September report, 115 miles of those pipes are at failing status, underground water pipes are leaking a billion gallons per year, in some cases sewer pipes are known to be leaking right next to potable water pipes. And the No. 1 complaint from local residents is deteriorating roads throughout town.

The new proposal also includes a citywide outreach and education process.

In an Union-Bulletin interview last month, City Manager Nabiel Shawa said the city was committed to opening up the proposal to public opinion, and added that city officials would be holding public discussion meetings.

Alfred Diaz can be reached at alfreddiaz@wwub.com or 526-8325.

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