Stanwood residents may see increase in utility rates

Published 1:30 am Monday, October 24, 2016

STANWOOD — City leaders are considering a change in how they pay certain state taxes, and it’s expected to increase utility rates for customers.

The goal is to free up money for water, sewer and drainage projects, namely replacing infrastructure such as pipes and pumps.

The Stanwood City Council is looking at charging customers directly for state utility taxes and business and occupation taxes on water, sewer and drainage. The city currently collects and pays the taxes — about $134,500 a year — from that revenue.

Charging customers directly would make the money available for projects, the city says. The to-do list includes replacing failing pipes on 81st Drive, 288th Street and 88th, 101st and 103rd avenues Northwest.

People would pay another $1.28 on their water rates, $1.58 on sewer rates and 18 cents on drainage. That adds up to about a $3.04 increase, which would bring the base rate for residential utility bills from $79.02 to $82.06.

The tax change would take affect Jan. 1 and would be in addition to previously approved rate increases.

Budget meetings are scheduled for Oct. 27, Nov. 10 and Nov. 21. Each meeting includes time for public comments. Meetings are at 7 p.m. at 26920 Pioneer Highway.

Another proposal is being reviewed to increase drainage utility rates for commercial and multi-family properties. It would bring in about $55,000 per year for new pumps and pipes meant to protect Stanwood from flooding.

The rate and tax changes are part of the planning for the city’s 2017-18 biennial budget.

Officials have proposed spending for 2017 and 2018 that exceeds revenue, which would require the city to draw from $2.1 million in reserves that have rolled over from past years. In 2017, $5.87 million in expenses are proposed and in 2018 the spending would increase to $6.24 million.

Nearly two-thirds of the budget is for police and fire services. The city contracts out for those and the cost of the contracts are increasing by nearly $500,000 over the next two years. Salary and benefit costs for the city are expected to go up more than $60,000 next year and nearly $200,000 is being moved out of the city’s general fund to balance the street fund. Income from permit fees in the city is expected to decrease.

Stanwood taxpayers in November 2015 voted in favor of a levy lid lift to pay for public safety.

“That lid lift isn’t generating enough revenue to pay for the contracts for police and fire,” city administrator Deborah Knight said. “It’s helping offset the cost.”

Knight said city staff are hoping the revenues this year will exceed expectations and expenditures will be less than anticipated, leaving more money to pull from for the upcoming biennium. The council is set to vote on the budget Nov. 21. The budget is expected to come back in front of the council in June for review, once the final numbers from 2016 are in.

Kari Bray: 425-339-3439; kbray@heraldnet.com.