City plans dollar-for-dollar water rate cut, tax hike

December 15, 2009

By Warren Kagarise

A state Supreme Court ruling will change the way Issaquah and other Washington cities pay for fire hydrants.City officials said the measure, headed for a City Council vote Dec. 21, would mean few changes for city water customers. The proposal cuts the water rate and adds a utility tax — a move meant to be cost-neutral to customers.

The city collects $129,000 through water rates to pay for municipal fire hydrants. The court ruling — Lane v. Seattle — said hydrants are a general government service, and cannot be paid for as a utility. Since the court ruled in October 2008, municipal officials across the state have searched for ways to remove fire-protection costs from utility rates.

Legislation headed to the City Council next week asks members to adopt a measure to cut water rates 2.28 percent — worth $129,000 — and another ordinance to adopt a 2.33 percent utility tax on city water — to raise the $129,000 lost by the rate decrease. The tax will enable the city to use money from the city general fund to pay for hydrants.

Officials said the rate reduction, coupled with the utility tax, would be the same, dollar-for-dollar, for every customer. The dual measures would go into effect early next year.

Councilman Fred Butler, a Council Utilities Committee member, said city officials should consider the measure to avoid legal trouble related to the court ruling. He urged other committee members to send the legislation to the full council.

“This will demonstrate that we got the process going in 2009,” Butler said during the Dec. 9 utilities committee meeting.

But the city utility is not the only water provider for Issaquah residents, due to annexations and geography.

Sheldon Lynne, the No. 2 official in the Public Works Engineering Department, said the city plans to negotiate agreements with Bellevue and the Sammamish Plateau Water and Sewer District because both agencies provide water for customers inside Issaquah.

Lynne said Bellevue and the district would then be responsible to develop a cost-neutral way to restructure the water rate and utility tax for Issaquah customers. Bellevue intends to use a cost-neutral method, Lynne added. The plateau water district is apt to develop a similar strategy.

“I can’t promise what those two utilities will do. I can only promise to try and reinforce to them to become neutral,” Lynne said.

Warren Kagarise: 392-6434, ext. 234, or wkagarise@isspress.com. Comment at www.issaquahpress.com.

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