REEDSPORT — Next month, Reedsport will ask its voters for the ability to raise utility rates without a vote to keep up with inflation costs.
In 2012, voters approved a charter amendment — Measure 10-119 — that requires voter approval for every new fee or tax increase since August 2010.
Now, the Reedsport City Council can only increase a fee or cost for service after an election is held and the proposed increase is approved by voters.
At the time of the 2012 vote, one supporter said the measure empowered residents and took away the ability of a few to increase taxes and fees.
Proponents of the May 21 referendum say the increase is necessary, because the cost of doing business is outpacing revenue streams.
City Manager Jonathan Wright said the water utility, which has gone 13 years without a rate increase, is now a critical area of need.
“We do understand that there’s public apprehension about government having a blank check,” Wright said, adding that if the referendum is passed the rates can only go up proportionate to whatever the inflation factor is according to the Bureau of Labor Statistics.
Public Works Director John Stokes said there are a lot of water pipes that are old and need to be fixed, and having the capital to repair the aging system will benefit the whole community.
“It’s no fun when you get phone calls from your customers and say ‘why is my pipe blowing out,’” Stokes said. “All you can do is tell them we don't have the money and the budget this year to fix it.”
Cities across America are grappling with aging infrastructure needs. Many water utilities have significant needs for pipe replacement, which is costly.
“We have quite a few water line breaks those are pretty consistent, it’s just due to very old, aging infrastructure pipes that are anywhere from 40 to 60 years old,” Stokes said.
He said this upcoming fiscal year, “we’ve actually reduced across the board the amount of projects that we’re going to do just to be able to save money in all the departments.”
Stokes said residents often ask why he can’t just transfer money from other city departments. He said the departments are meant to be self-sustaining.
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Wright explained it this way: “We can’t just take money from another utility and basically supplement one that’s not keeping up with its costs.”
Stokes said the water utility’s revenue is actually going down, as more residents transition to a metered system rather than paying a flat fee for water use.
The meters, or lack thereof, are causing the city to lose money in other ways.
“We’re one of the very few communities in the state that does not have all of its services metered,” Stokes said.
That prevents the city from applying for grants or forgivable loans, because the whole city has to be metered to do that according to Oregon law, he said.
“If everyone was metered we’d have a lot more funding opportunities,” Stokes said.
But the meters aren’t cheap. They cost $570 each, an amount that Stokes said can be billed over a year or paid as a lump sum.
Wright said the worst case scenario would be to outsource the utility. Brookings outsourced its water and wastewater treatment operations last year.
“We don’t have the ability to keep up with those costs,” Wright said. “At some point you get to a point of critical mass.”
For Stokes, it's a matter of looking at where the department can continue to cut costs if the referendum doesn’t pass.
“Our charge here, especially in public works is that we are here to serve the public, here to make sure everybody has clean water. The thing is its expensive running both of those departments. Just to keep up with the costs of everything,” he said. “That puts us in a real bind trying to serve the customer.”
There will be a town hall about the ballot referendum on May 6 from 5-6 p.m. at City Hall.