Cathlamet weighs utilities consolidation with PUD

The Town of Cathlamet and the Wahkiakum County Public Utility District are contemplating consolidating the town's sewer and water systems under the PUD, a proposal that has left people with questions and concerns about the rates they would pay-and what the loss of revenue could mean for Cathlamet.

At a meeting on Tuesday, the two entities discussed a draft study that looked at a possible consolidation. Residents and town leaders expressed a range of emotions, from dread over the possibility of rate increases to curiosity about the efficiency and oversight the PUD has said consolidation could bring.

"I firmly believe this is the most important decision this town is going to make in a long time," said Town Councilor Joe Baker. "It's a bill you're going to be paying for as long as you're here."

He believes the matter should go to voters. This view is not shared across the entire town council, but they all agreed they want significant input from the community before they proceed.

"There's a long way to go on this," said Town Councilor Jeanne Hendrickson.

Town Councilor Laurel Waller agreed and said there are still a lot of questions to ask and answer.

"We're going on this journey with the PUD," she said, addressing the audience at Tuesday's meeting. She urged them to stay interested in the issue and attend meetings, "You don't have to spend the nights with us if you don't want to. ... But we want you to come."

"We, this council, aren't going to choose something that kills the town," she said.

The PUD received a grant from the Washington State Department of Health to complete a feasibility study about consolidating the PUD-controlled Puget Island Water System and Cathlamet's water and sewer system. PUD Manager Dan Kay said there are concerns about the trajectory of the town's systems.

"The Town's lack of infrastructure funding is leading it on a trajectory to receivership," the PUD noted in a statement on its website, responding to criticism of the draft study by Cathlamet Mayor David Olson. "At that point, the State of Washington will mandate the utility systems be turned over to a receiving entity such as the PUD."

The PUD says it is concerned that - if things reach this point - by the time the PUD takes over the utilities, the town's system will be in "failure mode," maintenance costs will be higher and state funding available now will be gone.

Olson has pushed back at the draft study multiple times since it was submitted to town leaders. At the meeting Tuesday, he said the Cathlamet's utilities are not in any danger of receivership and that the town is in good standing with the state.

The Wahkiakum County Eagle reached out to the state for clarification about the status of Cathlamet's water and sewer systems, but had not received an answer to questions by press time.

The PUD's draft study noted that Cathlamet's water and sewer utilities are generally in good condition, but that significant improvements to both utilities will be necessary in the next five to 10 years.

Kay argued that the PUD is poised to do this work efficiently and cost-effectively. The PUD is also able to apply for state funding not available to the town.

"No one argues the PUD would not do a good job providing water and utility services within the Town if a merger took place," Olson wrote in a response to the draft study. "But the fact that the PUD would do a good job does not mean the Town is doing a bad job."

He has claimed that consolidation would result in a "triple whammy" to residents and ratepayers: double-digit utility rate increases, higher taxes as the town leans on other revenue sources to maintain certain services and reductions to or the loss of other services such as the library, maintenance of city parks and the public pool.

The PUD says the potential rate increase is not known yet and a rate study would be needed to work through the details. The PUD estimates that the water bill for residential customers would increase by about 10% on average if billed at the PUD's current rates.

The PUD said its analysis shows "the water and wastewater systems are a burden on the Town, especially with the unfunded, necessary infrastructure upgrades." The PUD argued that the town would potentially prosper with consolidation of the water and sewer utilities. Kay called some of the town's comments on the draft study "misleading, inaccurate or incomplete and distorted."

The revenue generated by the utilities is important to Cathlamet, the study acknowledged: "For this transfer to be attractive to the Town of Cathlamet, there would likely need to be an alternative source of revenue developed to offset this loss of efficiency and economy of scale."

Olson estimates that there would be a "half a million hole" in the budget if the town's utility revenue went away. The public works crew Cathlamet employs to run the utility also helps with pool, parks and street maintenance. This crew would not be there without the revenue from the utility, Olsen said.

"It's all the legs of the stool," he said. "You kick out the legs from that stool, your town services are never going to be the same."

Still, he said he is in favor of finalizing the PUD's study, making sure the information is correct and then discussing it in detail.

The PUD and town councilors plan to meet with representatives from the Washington Department of Health next week for more discussion.