In the face of a technical default with the current holder of the City of Sisters sewer debt - and the refusal of a potential funder to consider the refinance until the default was cleared - the council voted 4-1 to raise the City sewer rates from $35.70 to their pre-1990 charge of $39 per month per equivalent family dwelling unit (EDU).
This increase will resolve the default, which developed after the City reduced rates in 2009 to compensate for a water rate increase, by returning the City sewer fund to profitability.
Councilor David Asson submitted his written objections to the council and voted against the rate hike. Asson was vocal in his concern that the move was not sufficient to address the ongoing sewer fund viability and the inequities built into sewer rates from the beginning.
City Manager Andrew Gorayeb concurred with some of Asson's concerns, but counseled a gradual approach that won't have a massive and sudden impact on some users.
Asson said, "I am very concerned about this. There are three points, the utility rates by state law should cover operating costs; this measure I don't believe meets that test.
"The current sewer-rate-setting formula is not equitable, and it has been that way since the sewer (fund) was put in place," continued Asson. "It uses a January-February-March usage of water to calculate the usage of the sewers. That is a down time for the major users. In other words, others are (subsidizing) the commercial accounts.
"The council devised an equitable formula six months ago. That plan would have increased rates for all commercial accounts. Thirty or so of them would be substantially increased," said Asson.
Gorayeb agreed with Asson that the sewer fund needs a complete overhaul. Gorayeb also pointed out that the time to refinance the sewer fund debt was two to four years ago. He indicated that recent market trends have reduced the potential cost saving to almost zero.
"I would characterize this (the increase to $39) as the first step on a road that will probably include five more steps. I spoke with the people that would be most impacted (by the formula developed six months ago). The most impacted would receive a $2,000 per month increase in sewer cost, which is exorbitant. What that begs of us is that we try to pursue a course that is gradual. We are going to need to phase this in, probably over several years."