Board members and patrons of the Orofino/Whiskey Creek Water and Sewer District met with Orofino City Council members in a special meeting held April 7, to discuss the contract between them and whether or not the District should be obligated to pay the sewer reserve fee that was implemented by the city in October of 2013.
Dave Owsley, Chairman of the Orofino/Whiskey Creek District, stated that the reserve fund was not mentioned in the contract for sewage treatment which was signed in January of 2005.
In particular, Item XVI of the contract was cited as a major complaint of the District. It states, “ …Without binding the City, the City shall consult with representatives of the district to discuss increased rates in the event such rate increases become necessary to meet increased costs of operations being experienced by the City, and the City shall retain the right to increase rates paid by the District to meet increased costs of operation.”
The district is arguing that “costs of operation” do not include a reserve fee. Council member Don Gardner, Pro-tem for Mayor Smathers, who was unable to attend, said that it was a matter of perspective.
The fee was established by the city in order to build a reserve fund for the wastewater facility. The plant and structure itself are in good condition but the equipment is beginning to show signs of wear and tear and will at some point need to be replaced.
City council members were asked if repairing or replacing the equipment didn’t fall under maintenance of the plant, and why the wastewater plant would need to have such extensive work done if it was constructed in 1984, compared to other facilities which were much older. It seemed to some that it would still be in good running condition if everything was properly managed.
Water/Wastewater Supervisor Mike Martin explained that not only was the equipment (which ran all day every day) antiquated, but regulations have become more rigorous, and that some pieces of equipment ran in the neighborhood of half a million dollars to replace. Storm drains and wastewater collection systems were in need of repair, and leaks allowed more water into the system which in turn heightened the amount of water to be treated, as well as the cost to treat it.
Unfortunately, there is no quick or easy fix to the equipment’s decline and it is extremely expensive to replace. Orofino cannot afford to ignore the problem and wait for the inevitable breakdown of the wastewater plant before seeking a solution.
“We’re trying to avoid a huge expense for the patrons down the road,” Treasurer McGuffie explained. “I live on Riverside. When I moved there 10 years ago I paid $25 for sewer utilities; today, I pay $109 a month, because they had no reserve fund in place to address situations like this.” As a result, the cost is passed on to the consumer.
The budget to purchase equipment requires millions. Grants and loans are available of course, but nearly impossible to acquire without a Reserve Fund. The lender of course, wants to be assured of the money being paid back and a reserve fund is one of the items they look for when deciding on a recipient.
For the reasons above, the City asked residents who are hooked up to the sewer system to pay an additional $5 a month beginning in October of 2013 which will increase by $5 each year for four years to reach a cap of $20 added to their bill for the Reserve Fund. The money is designated a “Dedicated Fund,” which cannot be used for any other purpose. The monetary goal which would be set aside in the Reserve fund would be in the neighborhood of 2.5 million dollars. That figure would hopefully be matched by a potential grant in the future to replace antiquated equipment in the Wastewater Plant.
Still, many District patrons felt they should not have to pay into Orofino’s Reserve Fund; it was not in the contract.
Council member Gardner shared other information regarding an increase in the amount of water used by the District and requiring treatment via the Wastewater Plant.
A new meter measuring the amount of water used in the Orofino/Whiskey Creek District was installed in May of 2011. Since then, 133,750,000 gallons have been treated, averaging approximately 126,000 gallons per day. But records show that the use has increased.
Gardner informed the council that on that day, April 7, 2014, the meter read 197,000 gallons to have been used by residents of the district. The contract allows the District up to 150,000 gallons per day. Supervisor Martin reported that there were a couple of times that 450,000 gallons were recorded in a single day. The city absorbs the cost to treat the additional water.
Members of the audience asked how the amount used could be so high. The reason was attributed to rainwater leaking into the water collection system which obviously needed to be addressed, not only in Orofino but Konkolville as well.
Dan Chapman, owner of a 24 unit mobile home park on Orofino Creek, asked the council about the water rates charged and increases which have occurred in the past 25 years. Right then and there he did the math, with the help of his calculator, and announced that the city had done a pretty good job of controlling expenses. The rates charged by the city had increased $7 over 25 years, roughly an increase of .28 cents a year. “Nobody wants to pay more,” he said. “I don’t want to see it, but it’s a necessary evil, I don’t want to be hammered (financially) 10 years down the road.”
Board member Bob Hardy of Orofino/Whiskey Creek District felt the city’s decision to raise the district’s fees was unreasonable, and in violation of their contract with the city, but offered no answers when Gardner asked if he had brought any other solutions to the table.
The District informed the council that they would meet with their attorney and hold a meeting amongst their patrons to decide what steps to take next. City Council members were invited to attend if they wished, once a date had been set.