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About Cottage Grove sentinel. (Cottage Grove, Or.) 1909-current | View Entire Issue (April 15, 2021)
COTTAGE GROVE SENTINEL | APRIL 15, 2021 | 7A Rates from A1 looked at the city’s reve- nues and projected what each utility needs in or- der to meet demands, recommending a rate in- crease for sewer but not for water or stormwater. The analysis included annual inflation costs, the operational forecast, annual growth rates and the city’s adopted finan- cial policies. While FCS Group reported that custom- er growth alone would be sufficient to provide for rising operating ex- penses in both water and stormwater, capital plans and operating ex- penses for sewer caused the need for the rate in- creases. The report recom- mended three years of 12 percent rate increases, highlighting a bit of ur- gency to do so as a finan- Quality Cleaning Certifi ed Green Carpet Cleaning Specialists 541-942-0420 EVERYONE DESERVES A GREAT SMILE! 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Though the plant is currently able to operate with only the other 2009 clarifier to meet Depart- ment of Environmental Quality (DEQ) permit requirements, the failing clarifier must be repaired and operational by fall in order to meet the city’s processing requirements as flows increase. The cost of replacing or repairing the clarifier is estimated to be more than $1 million. FCS Group also per- formed a cost-of-service analysis at the Feb. 22 presentation. In an “early picture” breakdown of rate reve- nue that the city is cur- rently collecting from its sewer customer classes, FCS Group recommend- ed a different ratio of re- covery. A pie chart indicated that the residential class pays for 69 percent of cost recovery while the commercial pays for 26 percent. “If we go through this scientific process of allo- cating costs to functions Anytime. Anywhere. Any day... Matt Bjornn, Agent Bus: 541-942-2623 www.bjornninsurance.com Francisco Martinez, Owner (541) 579-0454 • Call Today! 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Councilors voiced awareness that the pros- pect of raising utility rates would not go over well in a community where high utility bills are a frequent source of consternation. “It just seems like any- thing that’s going to go before the citizens of Cottage Grove that is going to ask them for a [sewer] rate increase is pretty much a non-start- er,” said Councilor Jon Stinnett at the time. Many in the discus- sion, however, seemed to agree that a rate increase for sewer made sense in light of the data. City Manager Richard Meyers has credited FCS Group’s planning with helping the city get its utilities into a financial- ly manageable position over the years. “Water and stormwa- ter actually paying for projects out of the re- serve and accomplishing things and moving those things off the list as we get them done — we were struggling for years before trying to get that done,” Meyers said. As the topic was a dis- cussion item only, no decision was made at 1101198.1 That’s when you can count on State Farm ® . I know life doesn’t come with a schedule. That’s why at State Farm you can always count on me for whatever you need – 24/7, 365. GET TO A BETTER STATE ™ . CALL ME TODAY. State Farm, Home Office, Bloomington, IL to schedule your FREE in-home consultation 844-739-5874 BOGO 40 % OFF Call for details the time and staff were asked to bring addition- al rate proposals back to council. On Monday, Presi- dent of FCS Group John Ghilarducci presented to city council an updated five-year financial plan, this time showing an alternative rate increase of eight percent for the 2021-22 and 2022-23 years and a five percent increase for 2023-24. The alternative was proposed as minimum rate increases necessary to keep the treatment plant and collection system operational and complying with DEQ re- quirements. Its reduced rate was achieved by adjusting the city’s capital im- provement plan to move other projects such as sewer repairs out past the five-year analysis. In adopting this alter- native, the city would have been taking on an additional $300,000 in debt as well. The base charge for wastewater rates would have increased from $9.07 to $9.80 and the volume charge from $4.66 to $5.03 per month. This would have increased the monthly utility bill by $4.30. During council de- liberations on Monday, councilors considered the trade-off of future costs. “You’re talking about a $2 savings over three or five years to the rate- payer, but the projects we’re putting off are go- ing to get more expen- sive down the road,” said Councilor Mike Fleck. “And so that $2 that we pay now is going to turn into five or six by the projects that we’re put- ting off. And fiscally, this just doesn’t make sense.” Ghilarducci acknowl- edged that this was an accurate understanding of a trade-off. “We’re talking about incurring a little bit more debt in order to get the rates down to that 8 per- cent,” he said. “So, there will be interest costs as- sociated with that.” Fleck continued to de- scribe the current pre- dicament as a result of the city not addressing necessary projects in years prior. “Part of where we are is because we kept our rates low for years and did not do the projects that needed to be done, which is why we have the backlog of repairs to our system that we need,” he said, adding that he’d rather “bite the bullet” and get the projects done now. Mayor Jeff Gowing agreed that he did not want to place the burden on future residents and councilors. “And I don’t want who’s on council in five years to say, ‘Why did they pass this on to us?’” he said. Councilor Chalice Savage questioned if different rate increas- es could apply, propos- ing that lower income brackets could qualify for lower rate increases. Councilors Greg Er- vin, Kenneth Roberts and Candace Solesbee voiced their preference for the initial 12 percent rate increase presented in February. Stinnett asked that there be adequate out- reach and explanation to the community regard- ing the utility systems and reasoning behind the rates. Neither water nor stormwater rates will in- crease under the current plan. Furthermore, a fed- eral funding bill for water and wastewater improvements has been proposed and may be on the horizon, according to city staff. If the bill is approved, $40 million in low-in- terest loans and $10 million in grants may be available for waste- water treatment plant improvements for qual- ifying jurisdictions. The city’s staff has stated it will follow and apply for funding to help reduce overall cost increases to the utility users. 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