Water rates may rise in Richland

Richland residents could be looking at a water rate increase starting in January if the city council approves a plan submitted by the Public Works Department.

The council is set to discuss water rate options at its meeting tonight.

Public Works staff said in a report to the council that a rate increase is necessary to prevent the city water utility's reserves from being depleted.

City staff and the volunteer Utility Advisory Committee are recommending a total 9 percent increase, divided up into two 4.5 percent increases in January 2012 and January 2013, according to the report.

An ordinance being considered by the council tonight would make effective only the first 4.5 percent increase. Public Works staff would review the water utility's finances before asking the council to adopt the 2013 increase.

Under the proposed 2012 increase, the average residential customer would pay about $1.75 more per month for water.

The monthly fixed charge would rise from $24.60 to $25, and the consumption charge of $1.12 per cubic feet -- about 750 gallons -- would be lowered to 95 cents.

The city last raised water rates in 2008 to fund debt payments for the city's $30 million replacement of steel water mains.

But the insurance guaranteeing those debt payments was downgraded because of the financial turmoil of the Great Recession, and now the city is being required to keep $1.8 million in cash reserves to satisfy its bond contracts, the staff report said.

The rate increase is being proposed because the city didn't account for the cash reserve requirement in the last round of increases. If the reserve is not set aside, the city's debt rating likely would be reduced and borrowing costs would be more expensive for future projects, Public Works staff said.

For more information about the water rate proposal, see the agenda packet for tonight's council meeting online at ci.richland.wa.us.

The council meets at 7:30 at Richland City Hall, 505 Swift Blvd.