Sequim staff propose multiyear water, sewer rate and hookup-fee increases to avoid reserve shortfall

Staff from Sequim's utilities and finance departments presented a multiyear rate and general facility charge (GFC) proposal at a June 12 work session, saying models show the utilities' cash position could cross the city's minimum-reserve threshold within five to 10 years if changes are not made.

The presentation, led by a utilities presenter identified in the meeting as Paul, outlined three modeled scenarios and recommended a combination of GFC increases and multiyear utility rate increases. Paul said outside consultants (FCS Group) recommended earlier, smaller annual increases that were not fully implemented and that compounding inflation since 2020 has eroded the utility's purchasing power. "Some outside consultants called the FCS group did an a rate analysis for water and sewer and GFCs, and they determined back in 2020 that the utility on the sewer side needed a, 2% increase. Yep. 2% increase every year for 5 years," Paul said during the presentation.

Why it matters: staff's Waterworth model projects that under a low- or no-increase scenario the utilities' projected cash would fall below the city policy minimum (2.5 years of repair/replace capital expenses) and could reach a point where the city would have to delay projects or reduce services. Amy, who led the model demonstration, described the policy threshold on…