Updating city water system comes with expensive price tag

For more than eight years, the City of Ritzville has known it needs to make major improvements to its water system. Its prime wells that provide water to citizens and businesses continue to falter and its water mains are aging and leaking underground, losing their precious content.

Next year, $5.5 million in water system improvements will occur.

More than a year ago the city council acknowledged it must move forward with significant upgrades to the system to ensure water is delivered for domestic use and fire protection. Breakdowns and temporary failures of the city’s No. 8 well, the main water supply, and a declining water level in the Koch well, the back up well to No. 8, have emphasized the need for improvements.

The city’s water system by state law is considered an enterprise fund, meaning fees for use of the system must cover its operation and the improvements necessary to keep the system safely online. The council recognized quickly that it would need millions of dollars for the needed improvements, a much higher amount than what was available in the city’s water system reserves.

Engineering is underway to design and eventually construct a new 2,000 gallon-per-minute well near the water storage tank at the golf course. The new well would become the lead water supply to the entire city. Simultaneously the city will replace 10,000 lineal feet of water main, thus eliminating the oldest and likely most worn out lines that deliver water throughout the city.

To fund the projects, the city had to turn to the Drinking Water State Revolving Fund (DWSRF) to acquire loan funding. The city has two loan agreements with DWSRF. One is for the new well for $3,662,000. The other loan is for $2,231,000 for the installation of the replacement water main. Thirty percent of the loans, the state has determined, will be provided as grants and the state has waived a one percent administrative fee.

The 20-year loans will come with a 1.5 percent interest rate during the 20-year payback.

Repayment of the loans begins as soon as the improvements are completed. Accrual of interest will begin when the city draws the first portion of the funds to start and cover construction expenses.

When the council approved the loan agreements, they did so knowing the agreements required them to begin setting aside funds to make the initial payments. To do so, the council took $200,000 from its water reserve fund to establish the base for the repayment process.

They also approved a $5 per month, per water connection increase in water rates that went into effect early this year. Based on the very early preliminary estimates of project costs, users could expect their water bills to climb a total of $21 per month over the next few years. The city council opted to wait on the total increase, hoping to find ways to reduce the financial impact.

What is known is that ratepayers will see another $5 per month increase when the council approves the 2013 city budget. Another $5 per month rate increase is currently anticipated in 2014.

City Clerk/Treasurer Kris Robbins recently explained that users pay $30.60 for up to the first 299 cubic feet of water. If they use 300 to 799 cubic feet of water in the month, they are billed $36. For 800 cubic feet of usage or month to month, the ratepayer is charged an additional $1 per cubic foot.

Come January, the base rate will increase to $35.60. In 2014, the rate with rise to $41.60.

By comparison according to the Association of Washington Cities, Davenport users pay $39.50 per month for the first 1,000 cubic feet of water used. In Hatton the rate is $49.50 for using up to 5,000 cubic feet. Kahlotus users pay $50 per month for water and those in Sprague pay $27 per month for 1,000 cubic feet of water. The caveat in Sprague is that rates have not increased since 2003 and the town is preparing for its own water system improvements.

In Ritzville, users will absorb at least a $15 per month increase by January 2014. The final water rate will depend entirely on the final cost of construction and whether or not the city is successful in saving some money to reduce the impact on users.

One possible reduction is the annual savings of $97,000 since the city satisfied a previous water system improvement debt in 2010. New users such as the proposed truck stop on State Route 261 on the other side of Interstate 90 will also help as they use water and pay for that usage.

There are other unknowns that will likely impact the cost of water in Ritzville in the coming years. The No. 8 and the Koch well are being examined by the city’s engineering firm, Varela & Associates, Inc. The construction of a new well will not eliminate the need for the No. 8 well as support during peak usage in the summer months.

Eventually the city council will face decisions to repair the two aging wells or, perhaps, drill another replacement well.

Identifying what comes next will likely appear in the city’s water system plan update, a document required by the state by August 2013.

Until then the city expects to be under construction next year, bringing the new well online and installing the replacement water mains. Those costs are known and rolled into the two loans. Everyone is already paying more to help offset those construction expenses. All users will see increases during the next two years as the city continues to position itself to be able to pay for what has been referred to as long overdue improvements.