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Ad hoc review flags water and sewer operating deficits; council urged to consider rate and policy changes
Summary
Ad hoc committee and public commenters highlighted deficits in Blue Lake's water and sewer funds and suggested policy fixes, rate adjustments and a more aggressive approach to multifamily billing to recover revenue.
Council and ad hoc committee members told the City Council that the water and sewer operating funds show multi-year deterioration and require near-term attention.
During the budget presentation, staff said the water operating fund (fund 60) is a particular concern: eight years ago that fund had a projected balance of more than $1 million, the presenter said, but current projections show that balance has been drawn down sharply. The sewer operating fund was described as operating at or near a small loss and trending downward.
Public commenters with rate-study experience urged policy changes that could be implemented administratively. One commenter estimated that changing how multifamily and mixed-use connections are billed — reverting to historic unit-based charges instead of meter-size assignments the staff applied — could yield about $75,000 in additional revenue for the water fund.
Council members and the ad hoc committee discussed short-term fixes (fee and billing policy changes) alongside longer-term work (a formal rate study and forensic audit). Staff said a multi-pronged approach — immediate policy changes where permissible, a targeted rate study, and regular quarterly financial reporting — is necessary to stabilize the funds.
Council asked staff to bring back timelines and options for revenue increases and expenditure reductions as part of the revised draft budget.
