The Cathlamet Town Council over the next two months will analyze its water system fees and possibly prepare to make major changes in how much different customers pay for water.

The council met Monday evening with Skip Rand of the Rural Community Assistance Corporation, a multi-state agency established to help nonprofit and governmental agencies serve low-income people living in rural communities in the western United States. Rand will advise the council in its rate study.

In other business Monday evening, the council heard status reports on wastewater, library and street construction projects.

Rand said the council's goal for water rates should be to meet the budget for the water system. Those rates should not only cover cost operation but also put money into reserves for operations, emergencies, equipment replacement, debt service and capital projects.

Rand offered some observations from his initial analysis of the system.

The system produces 10 million cubic feet (cf) of water per year and sells and average of 408cf per customer.

The town includes 350cf of water free in its basic monthly bill; customers are charged for amounts over the 350cf. By not charging for that minimum amount, the town is giving away 85.8 percent of its water, he said.

"A lot of customers don't use 350cf each month, so they're paying for water they don't use," he said.

The town sells 44 percent of the water it produces to the Puget Island Water System. Under the contract between the town and Wahkiakum PUD, which owns the Island system, the Island system pays 14 percent of the revenue of the town's system. In other words, Rand said, 853 homes generate the revenue of 187 homes.

The average monthly water bill for town customers is $32.49 he said. People who use twice as much water as the monthly average pay only 16 percent more, $37.55 per month.

"This means that the little water users in this rate structure are subsidizing the larger users," he said.

Rand and the council briefly discussed possible changes, such as ending the free minimum or establishing a tiered system that benefits low volume users.

"You can do that," Rand said. "There are innumerable permutations. In the end, as long as you hit your budget amount and it's calculated correctly, you're financially viable."

For a system the size of Cathlamet's, Rand said he would expect rates to be in the range of $40-$45 per month.

The rate study involves several steps:

1. Rand and his staff will collect data.

2. They'll meet with a work group of town staff and council members to study the data.

3. The work group will identify issues and develop recommendations for the council.

4. The council will review the recommendations and adjust rates as it sees fit. They'll schedule public workshops to present the rates and issues.

"We'll also look at staff levels and the capacity of your computer equipment," said Rose Noval, who works with Rand. "Rate structures can be too much for staff or your computer programs to handle. You want to make sure your staff will be comfortable with them."

Rand and the council expect to start the work group in early July; Rand said the process should be finished by this fall when the council prepares its 2012 budget.

In other business, council members heard reports on four construction projects.

--The council adopted a resolution accepting as complete the construction of a new waterline to the Pioneer Community Center.

--Mayor George Wehrfritz said the town is very close to learning whether or not its application for a Library Heritage Grant to remodel the town hall and library will be approved. He said that announcement should come soon, and he's optimistic that the grant will be approved.

--Consulting Engineer Ken Alexander reported that the grant award for the town's $8.5 million wastewater treatment plant could come soon, too. The final design is complete, he said, and the town has received initial communication that it will receive funding for the project, which could go to bid this fall.

--Alexander presented two possible designs for improvements to 3rd Street and recommended the town delay calling for bids on that project to next winter.

The different projects show different parking configurations. Businesses in the area have set up nose in parking. Parallel parking would allow parking on each side of the street, with 12 spaces. Nose in parking would create 19 parking spaces but cost about $20,000 because of sidewalk and curbing layouts. In a good bidding environment, the town should be able to afford the extra $20,000, he said.

--Copies of the two designs will be displayed in The Eagle's storefront window later this week.

--Wehrfritz reported that the Washington State Auditor's Office has delayed its final interviews to go over its audit of town accounts. He had expected to have the exit interview before the June meeting.

"They keep asking questions," he said.