The Board of Commissioners of Liberty Lake Sewer & Water District has the legal authority, as established by Washington State law, to determine fees and set rates.
The new monthly base rates for sewer reflect an increase of 10% over 2018 rates and will be effective January 1, 2019. The new monthly base rates for water reflect a less than inflationary increase of 2% over 2018 rates and will be effective January 1, 2019. Monthly sewer service increases $5.49 to $60.39 and monthly base water service increases $0.29 to $14.56. Water overage rates remain unchanged. As utility costs throughout the industry continue to rise, District staff is committed to managing costs and improving efficiencies while upholding the District’s commitment to a sustainable future. These rate changes will help ensure the continued reliability and affordability of basic sewer and water services.
Visit https://libertylake.org/account/billing/ for complete rate information.
2019 Rate Explanation
The Liberty Lake Sewer and Water District is a Special Purpose District owned by our rate payers. We rely solely upon utility rates to cover the cost of the services we provide. Sewer and water utilities are operated as separate enterprises, have different operation and debt service costs, and consequently have different rates. We will discuss the impact to the rates for water and sewer individually below. We routinely conduct rate studies on both systems to be sure we are collecting the ideal amount of revenue to cover operation, maintenance, future replacement, and debt service costs. Rates are also correlated to the level of service. We strive for the lowest rates possible while maintaining the highest level of service expected by our customers.
Water: The District conducted a water rate study in 2015 to evaluate a water rate that has not been adjusted in 21 years (since 1994). The decision by the District Board of Commissioners was to increase revenue to cover the cost of operation and maintenance (excluding future replacement needs) over 3-years. The Board decided to accomplish this by increasing only the base water rate by 10% annually (not increasing the overage rates or other fees) 2016 through 2018. The overage rates remain the same since they were established in 1994. Starting in 2019, the District adjusted the base water rate by 2% which is less than the inflationary rate of 3.4% (according to the index we use). Water overage rates remain unchanged. We will only increase rates to the degree necessary to cover costs, conducting water utility rate studies as needed.
Sewer: This is a much more complicated utility and rate analysis. Similar to water, the District also conducts sewer utility rate studies. The last sewer utility rate study was conducted in 2012 in anticipation of mandates to upgrade our Water Reclamation Facility (WRF). The primary cost driver for sewer utility rate increases is the unfunded mandates imposed upon the District by the State Department of Ecology to meet increasingly stringent water quality standards for our discharge of reclaimed water to the Spokane River. To put this into perspective, the District was mandated to upgrade our WRF in 2006 to meet Phosphorus criteria in our discharge to the Spokane River. The cost of this upgrade was $12.5M; paid in part with District resources and a 20-year $6.3M loan. In just ten short years, in 2016 the District was again mandated to upgrade our WRF to meet additional Phosphorus removal limits. The cost of this upgrade was $22.7M; paid in part with District resources and a 20-year $15.9M loan. The combination of these two upgrades ($35.2M) and the related debt service is the primary factor for recent sewer utility rate increases. Additionally, the most recent upgrade has doubled our annual operation and maintenance costs from $0.5M to over $1.0 million annually. The District has increased the sewer utility rate by 10% annually 2015 through 2019 and we expect similar increases through 2020. Following that, the District will likely propose rate adjustments based upon the expected cost of operation and maintenance. We will only increase rates to the degree necessary to cover costs, conducting sewer utility rate studies as needed.
All wastewater dischargers to the Spokane River, in both Washington and Idaho, have, are, or will be upgrading their facilities similar to our upgrade for tertiary treatment. Rates for those entities will likely also increase. The most challenging aspect of these upgrades is our small customer base of only 4,346. The larger the utility customer base, the smaller the impact to each customer. $30.88 of the 2019 monthly sewer rate of $60.39 is for annual debt service of $1,709,176, and the District’s debt service requirements total $25,102,976 through 2038;all in support of these mandatory upgrades to our Water Reclamation Facility. That leaves only $29.51 toward regulatory compliance, operation and maintenance costs. Even with the rate increases, the District expects the sewer utility to operate at a deficit through 2020 (2019 deficit is $179,664).
We strive to maintain the lowest rates and best service possible for our customers. We will continue to communicate the unfunded mandates’ impact on sewer rates through our quarterly newsletter, the District website, monthly customer statements, and Liberty Lake Splash publications. We are always available for any and all questions. Please do not hesitate to contact us at 922-5443.
