Everyone wants fair water rates, including the City of White Salmon’s Citizens. It is important for people to recognize that the municipal water utility is a Public Utility District owned by the City of White Salmon. The Citizens of White Salmon are the Stakeholders of the Public Utility District. The Stakeholders historically funded the development of the municipal water utilities , at least in part, by property tax revenues.
As City citizens and stakeholders they alone are responsible for the financial obligations of the municipal water utilities. Municipal water users outside City limits are not financial obligated and did not pay additional taxes to develop the Public Utility District.
There are several costs that are quantifiable which justify a basis for rate differentials between inside and outside city limit customers and are recognized by the American Water Works Association (AWWA). There are a variety of additional direct costs associated with serving outside-of-city customers.
- Greater distance and/or higher elevation from central facilities (i.e., water supply or treatment facilities).
- Increased demands on limited water resources resulting in increased risk associated with water shortages and resulting in leased water rights from Klickitat County PUD.
- Increased travel time and related expenses for operations and maintenance, meter reading, service calls, etc.
- Lower development densities resulting in higher costs per connection.
- Risk associated with utility ownership and long-term debt obligations ultimately residing with residents of the City.
- A rate of return on investment due to resident “owners” of the water system relative to outside users of the system.
- Larger horsepower pumps, additional storage, and larger water transmission lines are required to provide adequate water and water pressure to commercial and residential services in the outlying areas of the City.
- Additional expenses associated with working in County and State right-of-ways.
These costs are quantifiable and did provide for the basis for rate differentials. It is clear that a different rate structure for outside-of-City customers is justified based on quantifiable cost of service differences.
Municipal water utilities have several other user classifications to consider beyond inside vs. outside residential user. Commercial, wholesale, industrial and public facilities are all different types of user classification that must be evaluated to determine quantifiable cost of delivery of services. Each user class will have its own rate structure based on its own particular quantifiable facts as stated above.
The different classification user rates are based on the cost of delivery to the customers. If water rates were not evaluated by user classifications we would be creating an unfair rate structure. If everyone is charged the same amount then one or more user classifications are paying higher fees to support the other classifications.