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Council concerned about water rate hike

By Staff | Dec 18, 2008

Things are not getting any better in the financial department at the Island Water Association.

In a brief presentation to the City Council on Tuesday, IWA General Manager Rusty Isler said that with two months more data to analyze since the IWA made its initial request for an 18 percent rate hike, “the news is not encouraging.”

After presenting Council with the answers to a long list of questions generated at a previous meeting, Isler again reiterated the measures that the IWA has implemented in an effort to cut expenses in the face of

decreasing revenues.

“We’ve cut staffing by three positions, which is 10 percent of our total staff,” said Isler. “We’ve reduced the capital budget.”

Despite these cost-cutting maneuvers, revenues have continued to fall due to strict water conservation measures, while expenses such as health insurance and chemical costs have continued to climb.

Mayor Mick Denham continued to express concern for the IWA’s long-term business solvency in the face of continued decreasing water consumption.

“We’ve got all kinds of hotels seeking ‘Green Lodge’ accreditation,” explained Denham. “We have residents who are replacing lawns with native plantings that require little to no water. And an 18 percent increase will cause people to conserve even more. As consumption decreases, revenues will continue to decline.”

Denham stressed that he was not on a “witch hunt.” Instead, he explained that he was expressing concern as an interested member of the Island Water

Association.

“I am concerned about the business,” he said.

Vice Mayor Kevin Ruane also thanked Isler for providing the additional information that the Council had requested.

“I’ve looked at the financials and I’ve had conversations, and the financials warrant the increase,” said Ruane, again chiding Isler for his delay in seeking an increase. “You’ve made an awful lot of cutbacks here and, unfortunately,

some labor had to go and you’ve already done that.”


Ruane concluded his remarks by saying that he would hold Isler to his promise that he would not be back before Council each year seeking additional increases.

Councilman Marty Harrity echoed Ruane’s statements, adding that while he was is favor of approving the increase, he was also in favor of some long-term financial planning, such as initiating cost of living increases.

Councilman Peter Pappas simply voiced his continued approval of the increase, while Councilman Jim Jennings expressed concern about a huge increase causing bad feelings.

“There’s got to be some way to catch up with the cost of living, the cost of doing business,” said Jennings. “I don’t know if you can put together some kind of reserves, but there’s got to be a way to do it.”

Jennings also said that it was hard for Council to go to the citizenry and tell them there will be an 18 percent increase.

“That’s a sound bite that you just don’t want to hear,” said Jennings. “There’s a potential for a lot of bad feelings. And I’d have a hard time supporting an 18 percent increase today.”

Pappas responded with disbelief to his fellow councilors’ comments.

“This is the first time in my life that I’ve ever heard a condemnation of a business for not raising prices,” said Pappas with obvious indignation. “And I’ll never hear it again.”

In addition, Pappas took issue with his colleagues’ concerns about the way the IWA does business.

“Eighteen percent of $10,000 may be a whole lot of money, but 18 percent of $10 isn’t a whole lot of money. Why can’t we look at it that way?”

Council ultimately directed City Manager Judie Zimomra to draft a resolution

enacting the requested 18 percent increase, for further review and hearing at the Council’s next meeting, scheduled for Tuesday, Jan. 6, 2009.