Chimacum schools chief leery of proposed electrical rate hike

CHIMACUM — Rick Thompson, superintendent of the Chimacum School District, said the 6.1 percent electrical rate increase proposed for public school districts would adversely affect his budget.

“It’s too steep,” he told Jefferson County Public Utility District commissioners during a rate hearing Monday night at the Chimacum Fire House.

“We have 200,000 square feet of property,” he said.

“In a detailed report that was done, one-third to one-half of our properties are really old. They’re hard to heat and hard to insulate and there’s no way I can correct that quickly.

“Our school district is the lifeblood of our community. We are an aging community. We have to invest in these kids because they are our future,” he continued. “We have difficult choices on how we balance our budget, and a concern about how it all comes together.

“We’d ask for a soft landing,” Thompson concluded.

Amy Khile, Port Townsend School District business manager and director of finance, echoed his concerns.

“As our fixed costs go up, there’s nowhere else we can look for cost savings than our staff,” Khile said.

The proposed electrical rate charges could affect the Chimacum, Port Townsend and Quilcene school districts’ cost for electricity beginning in April.

During the three-hour hearing, Gail Tabone, a senior associate with EES Consulting of Seattle, said that the proposed school rates are interruptible, a concession that allows power to be reduced during peak times to provide the lowest possible rate. She said, however, that power would never be interrupted.

The commissioners agreed to review the proposed school rate schedule and consider spreading the increases over a three-year period. This compromise will be discussed in more detail at a meeting planned for this coming Tuesday.

During a detailed presentation, Tabone said that the PUD gets 100 percent of its power from Bonneville, which is the district’s biggest expense, accounting for 46 percent of the annual budget.

“Half of the costs are purchase costs from Bonneville Power that you have no control over. Their costs go up and they increase their rates every two years. They did it in 2017. The percentage was a 5.1 percent increase in 2017. This is almost half of your budget,” she explained.

Residential customers would see a base rate increase, with the average bill increasing 5 percent, from $14.50 to $18.50. There would be no rate increase in 2019 for any customer class.

Water and sewer rates also would be increased for all users.

“Past water and sewer rates have not kept up with inflation,” Tabone said. “There has been no increase from 2012 to 2015, with a 6 percent increase in 2016.

“We developed some proposed rates as a starting point, she said. “It’s not necessarily good news, but some of that is coming out of what the budget is and some other circumstances related to revenue for the water side of the PUD.”

Tabone said enough money is in reserves to fund capital projects over the next few years.

Revenues were forecast to be $532,000 in the budget but that was based on the previous year that included a $350,000 one-time grant that is not available in 2018, she said. Without that grant, the budget comes up short.

Tabone offered the commission two options to consider for water and sewer rates.

The first is a 10 percent increase in all rates for 2018 and 2019, which would result in a loss for 2018, and using significant funding from reserves.

The second option is a 10 percent increase for all rate users plus a $10 capital surcharge for all water/ sewer customers.

“This last option,” she said, “would provide sufficient revenues to fund operating expenses and capital improvement projects. There would be no need to raise rates in 2019.

“Per 100 gallons, an increase of 10 percent and a surcharge would equal $13 per month or a 40 percent increase. Usage rates would go up by 10 percent. The more water you use, the higher your rate will be.”

She pointed out that both present and proposed water rates are considerably lower than what others pay in Port Townsend, Clallam County and Port Angeles.

A prepared graph showed that with a surcharge of 10 percent, a current customer would pay $46.52 per 100 gallons. Port Townsend customers inside the city are charged $52.07 per 100 gallons; outside the city they pay $62.52. Clallam County customers pay $55.97 per 100 gallons. Inside Port Angeles city limits, customers pay $47.87; outside city limits the charge is $71.80.

Low-income users would pay an increase of $1.51. All water customers would pay a $10 capital surcharge.

Sewer rates would increase 10 percent as well.

Tabone recommended the commissioners continue all current low-income programs.

Water and sewer rates will be discussed in more detail at a meeting scheduled for Feb. 20.

The evening’s public comments reflected such concepts as allowing for different base rates to reward those who are consuming less energy and the consideration of additional plans to reduce rates for low-income users.

After the meeting, Commissioner Kenneth Collins said he was impressed that one of the citizens new to the area said he attended the meeting with a different agenda and was educated.

“He came away with a different understanding of the process,” Collins said.

He also said the commissioners will take a good look at Chimacum School District’s electric rate concerns.

“We understand their budget restraints,” he said.

Collins said he feels the commission could do a better job communicating the programs available to low-income users.

He said up to 1,000 customers might be eligible, although they haven’t even enrolled a third of those.

“We have programs available: Power Boost, that provides a $35 per month reduction in a bill, and there is help from Olympic Community Action Programs (OLYCAP),” Collins said. “Assuming we move forward with a base rate change, this assistance will help defray that increase.”

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Jennie McMacken is a free-lance writer and photographer living in Port Townsend.