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Water rate hike plan stuns residents

Brian Walker | Hagadone News Network | UPDATED 11 years, 11 months AGO
by Brian Walker
| June 27, 2013 9:00 PM

SPIRIT LAKE - Depending on who you ask, a proposed doubling of a water rate hike for two Spirit Lake-area subdivisions is either sticker shock or about time.

The monthly base water rate for the Spirit Lake East and Treeport subdivisions, which have 290 total property owners, is proposed to increase this fall from $12.50 to $24.75 for up to 9,000 gallons. The $1.20 for each 1,000 gallons used over that wouldn't change.

"We've been having water pressure problems and they want a huge rate increase," said Ron Anello, a concerned Spirit Lake East homeowner. "To me, it sounds like Washington, D.C. It raises red flags."

Leslie Abrams, manager of the Spirit Lake East Water Co. ran by a group of shareholders, said the reasons behind the hike proposal include paying for $250,000 in system upgrades completed five years ago, inflation and to establish an emergency fund in case of equipment failures.

Abrams said the company isn't eligible for grants and emergency funds like many homeowners' associations and water districts because it is privately owned.

She said there has only been one rate increase - 50 cents in 2006 - in 30 years. She added that the rate - even if the proposal is approved - is still a good deal compared to most area water districts.

Abrams said, in hindsight, she wishes the company would have requested smaller rate hikes sooner but she said it was trying to improve the morale of homeowners frustrated by decisions made by previous shareholders and the developer. She said the company was reluctant to raise rates out of the gate.

The current shareholders acquired the company in 2009.

"We've lost five years of return on the investment (of previous upgrades)," she said. "The customers got five years without paying for an increase and we lost out. While the former shareholders had the system, there were a lot of upgrades to the system that haven't been recovered by the customer."

The Idaho Public Utilities Commission is investigating the rate hike proposal to see if it is justified and is expected to make a decision this fall. A public hearing is expected to be held on a date to be determined later this summer.

"This isn't something anybody takes lightly," Abrams said.

Abrams said the meters in the system are only read quarterly because some meters can be difficult, if not impossible, to reach during the winters in the snow belt. She believes the company has lost income as a result.

"Sometimes we pro-rate usage over nine months," she said, adding that the company may not see the additional income during months residents use more than 9,000 gallons. "For 30 years, residents have been benefitting from the quarterly meter reading procedure."

As a result, Abrams said the company has requested to go to a monthly meter reading and billing cycle, when possible, for up to eight months out of the year. Such change would also need to be approved by the IPUC.

"We've had customers with a $3,000 bill due to leaks," she said. "If we do the billing and read meters more often, we could catch those problems more quickly."

Abrams said the system was only designed to provide domestic water use, not for irrigation. Hence, that could be the root of the occasional water pressure problem.

"We haven't limited the usage to this point," she said. "Technically, they shouldn't be using the water to water their gardens."

Many homes in the affected areas are on 10- to 15-acre lots. Therefore, she said she understands the need for people wanting to water their gardens, but the bottom line is that the system is still operating under the conditions from when it was created 30 years ago.

"We push the limit on what our infrastructure can do," Abrams said.

Abrams said she believes it's a vocal minority of homeowners who have concerns, others believe the reasons for the proposal are justified.

"You're always going to find some people who are unhappy about the service or how much they're paying," she said.

Anello said smaller, more consistent rates would be easier to swallow. He's also thankful the IPUC is involved as there are conflicting reports on how much debt remains from the previous upgrades. The commission held an informational workshop on the case on Tuesday night in Spirit Lake and will return for the public hearing.

"Nobody has a problem with the rates being raised as long as it's fair," Anello said.

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