Your Utility Bills Will Increase HOW Much?

Analysis by Dean Silver

Half of the Ashland City Council business meeting was essentially a study session last night.  The agenda had called for adopting three infrastructure master plans at the September 6 meeting, but it was decided not to vote in order to allow more time for study.  The presentations gave a good indication of bad financial news to come for the residents of Ashland.

Wastewater Collection

The presentations were made by Public Works Director Scott Fleury and representatives from RH2 Engineering. The 2022 Comprehensive Sanitary Sewer Collection System Master Plan was the first item.  The contract for the plan alone cost the taxpayers $298,452.  The anticipated inflation adjusted cost for capital improvements to the system are estimated at $26,350,000 over the next twenty years.

Sewer rates on your utility bill are currently $33.94/month for residential customers.  That rate is projected to increase to $45.89/month over the next five years starting in July 2023.  That is an increase of 35% or an average of roughly 7% per year.  Thus a residential customer currently pays $407.28/year for wastewater, and will be paying $550.68/year in 2028 if approved.

This resolution would have been simply to adopt the master plan which makes these recommendations.  Any rate increases will have to be approved by the council in any master plan will have to be approved by council.

You can view the Comprehensive Sanitary Sewer Collection System Master Plan Adoption here.

TAP

Next up, improvements to our newest water source, the Talent-Ashland-Phoenix Intertie (TAP), which provides treated water from the Medford Water Commission.  It is pumped uphill from Medford through the other cities into Ashland’s distribution system.  Talent and Phoenix both rely exclusively on MWC supply, while this source is a secondary backup for Ashland’s primary water supply from Reeder Reservoir.

Public Works Director Scott Fleury

The cost of the 2020 TAP master plan was split between the three cities, each paying $42,942.  It presents two upgrade options.  According to the agenda item, Ashland’s share of those options would be $2.61M and $5.19M respectively; it does not specify a timeframe for these expenditures.

Examination of the master plan itself reveals costs split into three phases over 40 years.  The totals presented there are $5,445,619 and $7,936,730 for Ashland’s share of the improvements.  It is not clear why there is a discrepancy between the two sets of cost estimates.

Rate increases were not included in the agenda item, but the master plan quotes increases of $2.80 to $6.00 per month.

Interestingly, there was no discussion of increasing the capacity of the system to 3Mgal/day from the current 2.13Mgal/day, which would be possible under current agreements with MWC.  That oversight should basically invalidate this “master plan”, since the capacity upgrade option is essential to consider when discussing the future of TAP.

Whatever the ultimate costs, improvements to TAP are not optional.  As we have seen this year, Ashland badly needs this backup water supply.  In fact, it would be prudent to consider expanding TAP capacity as much as possible.

You can view the Talent-Ashland-Phoenix (TAP) Intertie Master Plan here.

Stormwater and Drainage

Finally, the 2020 Stormwater and Drainage Master Plan was presented.  The cost of that plan was $227,142.

It includes 14 capital improvement projects for a total of $6,127,000.  That total is not mentioned in the agenda item, or in the master plan.  Keep in mind these estimates were prepared in 2020, before the pandemic and recent inflation and supply problems.  A +50% estimate was included, which totals $9,190,500.

We find the suggested rate increases in the plan.  It shows increases of 90% compounded through 2034.  A single family residence that now pays $5.43/month would pay $7.93 in 2028, and $9.47 in 2034.

You can view the Stormwater and Drainage Master Plan here.

The Bottom Line

All of these projects are essential.  Infrastructure must be maintained.  It’s impossible to predict the ultimate cost of any of these ongoing projects, but it will be substantial.  The inevitable rate increases will have a significant impact on every resident’s budget.

The total of the projects in these three master plans is $43,477,230.  These expenses will be borne by the 21,554 citizens of Ashland unless grants can be found to finance them.  It would not be unreasonable to expect the costs to escalate in the future.

Keep in mind that these master plans are anticipatory, and may not include other points of failure that were not foreseen.  This plan to replace sewer and stormwater mains includes only a small percentage of the total in the systems.

The Sanitary Sewer Collection System covers the sewer system only.  The other component of the wastewater system is the wastewater treatment plant.  The latest approved Capital Improvement Plan included $13,006,000 in projects for that facility alone in the next six years.

Also keep in mind that the latest version of the Water Master Plan includes a replacement of the water treatment plant at a cost of at least $40,000,000.  The council took one more step toward realizing that controversial project, as noted below.  The latest approved Capital Improvement Plan included $61,575,000 in projects for water infrastructure in the next six years.

The city is attempting to transition to electricity as its primary energy source, and that will necessarily entail major improvements to the electric capacity and distribution infrastructure as well. 

Of course the streets also require periodic maintenance.  According to the budget, our roadway system “includes 220.98 lane miles, 5,023 signs, 37 miles of markings, 320 cross walks,
365 stop lines, curb/gutter, and ground maintenance of the boulevards.”

Finally, the city owns and is responsible for a wide variety of real estate and equipment, all of which require maintenance.

All of this underscores the need for the city to get its budget and expenditures in order as quickly as possible.  That will require a city council that is willing to tackle these issues immediately and realistically. 

In Other City Council Business

Councilor Seffinger was absent, Councilor DuQuenne arrived late for this meeting.

The City Manager reported that Bill Molnar, Director of Planning, will be retiring on October 1.  One could not help but wonder if the Croman Mill controversy might not have had something to do with that.

The consent agenda approved liquor licenses for OSF and the Blue Toba Restaurant.  It also approved 24 committee appointments en masse without discussion.  It is still not clear if the disposition of the various committees has changed as proposed by the city manager.

A resolution establishing a policy for commemorative flags at city facilities by adding it to the current city street pendant policy passed 5-0.

A supplemental budget resolution that contained nothing unusual passed 5-0.

A resolution authorizing staff to move forward to attempt to submit a formal loan application
package to the EPA for the Water Infrastructure Finance and Innovation Act (WIFIA) program to fund a majority of the new Water Treatment Plant Project was discussed, but no action was taken.  The required draft resolution had not been included with the agenda package, so council action was postponed.

The most controversial item was the water treatment plant design amendment.  This resolution authorized $676,282 to move ahead with the final design work for the proposed new water treatment plant. Councilors Moran and Duquenne object to the assumption that the new WTP must be built.  Councilors Graham, Hyatt, and Jensen contend that the new WTP is essential.  The vote was the usual split, 3-2.

During the discussion, Councilor Moran stated that he will continue to tell the truth about the proposed project.  After the vote, Councilor Jensen complained, outrage that Moran would make such a statement, because he felt that it implied that the others were NOT being truthful.  He described Moran’s statement as “disrespectful, abusive, and wrong.”  Despite Jensen’s umbrage, Councilor Moran responded, “Really?  From the guy who threw the code of conduct overboard?” He went on to state that he is telling the truth and will continue to do so.  When asking Jensen if they were good, he received no response, but Jensen did appear to unplug his microphone.

It was a little like the bad old days of this council.  We all had hoped they were behind us.

The dynamics will surely change when the new Council is elected in November.  The priorities and trajectory of the Council will surely change as well.

Remember that every vote counts.

You can watch the meeting video here.

You can view the agenda here.