Committee backs ‘aggressive’ rate-reduction scenario for council review in utility rate study

The Snoqualmie Parks and Public Works Committee on Feb. 19 reviewed three utility rate scenarios and directed staff to present the aggressive rate-reduction (max-debt) option to the full council and prepare a draft ordinance based on that scenario.

Paul Quinn of FCS, the city’s rate-study consultant, presented three scenarios: the ordinance scenario (previously discussed), a reduced debt-coverage scenario, and a new aggressive rate-reduction scenario that maximizes near-term borrowing. Quinn said the aggressive scenario identifies about $4 million of near-term capital projects that could be deferred one to two years and increases total proposed debt proceeds through 2030 to roughly $41 million.

Quinn said the aggressive scenario also lengthens the sewer loan term from 20 to 30 years, which he estimated would save about $110,000 in annual debt service but increase lifetime interest costs to about $25 million compared with roughly $19–19.5 million under other scenarios. He said the city’s policy target is 1.5 times debt-coverage and that the three-utility combined coverage remains above that level in all scenarios; treating utilities as one entity is a component of the aggressive approach.

Quinn presented projected bill impacts for a typical residential customer in 2025: the ordinance scenario would produce an upfront increase slightly above double digits (about 12% in 2025), the reduced-coverage scenario would be just under double digits (about 9.97% in 2025), and the aggressive scenario would lower the 2025 increase to about 6.7% followed by smaller, inflationary adjustments thereafter. He also summarized proposed cost-of-service phase-ins: multifamily water rates would be frozen through 02/1930 under the proposed phase-in and multifamily sewer would see minimal increases in the first year then a freeze; high-strength commercial sewer customers would see larger percentage increases (roughly 19% under the ordinance scenario, 15.5% under reduced coverage, and about 11.5% under the aggressive scenario in 2025) because they are currently underpaying their cost to serve.

Council Member Holloway and others discussed whether to present the material directly to council. Chair Kat Cotton said the agenda bill that goes to council should be written against one option; committee members agreed the aggressive rate-reduction scenario is the preferred option to take forward. The committee asked staff to place the presentation on the next council meeting and to bring a draft ordinance for the aggressive rate-reduction scenario to the following committee meeting.

The study also includes forthcoming general facility charges analysis and additional ordinance development steps before final council action.