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Tacoma: TPU presents budget plan; details rate increases, job cuts

Post by Lewis Kamb / The News Tribune on Oct. 12, 2010 at 6:22 pm with 15 Comments »
October 13, 2010 10:56 am

Rate hikes faced by Tacoma Public Utilities’ customers are slightly less than those first proposed last month, but they remain a “significant” impact to ratepayers, public utility officials told Tacoma City Council on Tuesday.

“There’s never a great time for a rate increase,” TPU Director Bill Gaines told the council, when presenting the latest 2011-12 budget plan.

Still, in order to balance the budget, utility officials are recommending “system average rate increases” for each of the next two years of 5.7 percent for Tacoma Power customers, and 5 percent for Tacoma Water customers.

Alternatively, TPU officials proposed that policy makers could choose to impose a one-time rate increase in 2011 of 9.8 percent for power, and 8.4 percent for water.

In either case, water rates likely would go up on January 1, with power rates to follow on April 1, officials said.

As part of the budget plan, TPU officials also detailed a proposed reduction of 84 full time employees across all utilities – water, power and rail – that would include 64 positions cut by attrition and 20 by layoffs.

All proposed layoffs would occur within Tacoma Power and target positions “where work has gone or will go away,” Gaines said, such as in services provided to new construction, which has largely disappeared amid the dour economy.

The proposed job cuts and rate hikes are necessary to balance the budget, amid stagnant revenues and unavoidable capital costs imposed by regulatory mandates, TPU officials said. Gaines and other utility officials also said they’ve worked hard to cut “controllable” costs as much as possible to minimize the rate hikes and avoid cutting into services.

Overall, the proposed budget plan for all three utilities comes in at $1.1 billion – about $109 million less than the current two-year budget, Gaines said.

If approved, the proposed power and water rate increases, both of which would take effect next year, reflect average increases across all customer classes, from residential to commercial, TPU officials said.

Exactly how much the proposed rate increases would impact individual classes – such as single family residential customers – is not yet clear because individual class rates have yet to be calculated, TPU officials said.

If approved, the 5 percent per-year system-wide hikes recommended for Tacoma Water over the next two years (or, the one time 8.4 percent increase in 2011) should be close to what families would expect to see on their bills, Gaines said.

Utility officials project those proposed hikes would add about $1.50 to the average monthly residential water bill (now about $28) for the next two years for customers inside the city (Amounts of increases would be more for customers in outlying areas).

Meanwhile, the average monthly residential electric bill — now about $61 for in-city customers – projects about $5 higher per month for the next two years, officials said.

Still, power rate increases for single family residential customers might actually come in above the proposed “system average” hikes of 5.7 percent annually over two years (or the one-time option to hike rates by 9.8 percent next year only).

Councilman David Boe said by his calculations, residential power customers could face rate increases of more than 8 percent under the option to spread smaller hikes over two years, or possibly double-digit increases under the one-time rate hike option.

“That’s my concern,” Boe said.

The latest proposed rate increases are slightly lower than hikes proposed as part of individual utility budgets presented to the TPU board last month, in part because they incorporate new calculations for employee wage freezes, TPU spokeswoman Chris Gleason said.

As part of his general fund budget plan for the city, Tacoma City Manager Eric Anderson proposed across-the-board wage freezes for all city employees after those initial utility budgets had been presented.

In addition to proposed water and power rate increases, Tacoma Rail proposes rate increases for its industrial and commercial rail customers – by $2 per car (to $57) for intermodal loads, and by $33.40 per car for commercial loads (to $295, or $345 for Hazmat).

Even if the proposed utility rate increases are approved, TPU officials say Tacoma’s water, power and rail utility rates will remain lower than those charged by comparable utilities.

“We’ve been very concerned about the rate increases, which of course, we knew would be required,” TPU Board chairman Bob Casey said.

But, Casey added, he has  “not seen the depth of review” of any previous utility budget than this one during his seven years on the board.

The budget proposal is next set to be formally presented on Wednesday to TPU’s board of directors, who are scheduled to approve a budget two weeks later, Casey said.

Ultimately, a final budget and any rate increases must win approval of the City Council.

Among other details they requested, council members asked for more information about recent pay increases to some utility employees to help them analyze the budget.

Councilman Jake Fey also asked utility and city officials to provide more information about established programs to help seniors and other ratepayers who might have trouble paying increased utility bills.

Leave a comment Comments → 15
  1. omega629 says:

    This is crazy. One of the reasons i regret moving to Tacoma.

  2. Those “average” water and power bills used in the article are crazy low. I have a small home with three residents and our power and water bills together average closer to $200 a month.
    TPU is trying to make it seem like we pay so little for these services as it is that this won’t be a big hit, but it will be.

  3. What gies??? Rate increases but no corresponding freeze on employee salaries.

  4. chip98404 says:

    I am in-city and it has been YEARS since I saw a bill of $61.00 for electricity in any one month! There are just two of us now and we keep lights off, heat low use CFCs like we should, and watch our water use. The cheapest 2-month bill this year has been $450.00. Last January the bill was nearly $900.00. That is going to be a $25.00 to $50.00 a month increase for me. Not chicken feed! Maybe I have to go back to kerosene lamps like my grandfather used to use.

    (I wonder what Eric Anderson’s monthly bill is…)

  5. I agree with Vincati this is going to be a bigger hit on the people than it is stated.

    Please tell the truth to us and not cover it up all the time.

    Please let use know if the city employees received there raises while the people how do not work for the city and state did not.

    Please also let the people on Social Security know what there increase will be sense they have not received a cost of living raise last year and also this year.

  6. the3rdpigshouse says:

    Seniors and other will not have a problem coping with the economy next year because the rate of inflation for the past 2 years was too low – so their pay was/is frozen!! I guess they will have to pull an “OH-Bummer” and just print more “cash from the stash”!!!!!

  7. ttownwherethesunrises says:

    How about firing the person that ok’d the decision to landscape the Utilities building so opulently? How about selling some of those plants that the average Tacomanite can’t afford? How about just stop spending so lavishly at this facility?

  8. Why is it that all final statements from utility officials are, it is always cheaper here than somewhere else? If the people living here did not know this, they would probably not be living here. That does not give them the right to raise rates just because it is less for electricity in WA than it is in NY, NJ or wherever.

  9. Stormy53 says:

    Interesting that they are balancing a budget by laying off workers when management received a 14 – 20% increase in pay in 2010 and they just recently hired two new supervisors who fall into that category. Seems like a backwards move to me and unfair to those losing their positions.

    Once again it is the customers and the every day workers who are suffering while those with big pay checks lay people off but don’t take a cut in pay themselves.

  10. I made a public records check last year when they raised the rates-AGAIN.
    Tacoma Power and Tacoma Water/Wastewater/Solid Waste raised rates EVERY YEAR for the past 12 years. During the middle of that period, their stated reasons for a rate hike were identical to the previous two budget proposals. In other words, they raised rates because they could.
    The 2009-10 budget contained over $6Million for vehicle replacement. That’s enough to purchase 461 new vehicles. At that rate, each TPU Employee could be given a new car every 3 years.
    The last “$2.75 Increase” is costing me over $10 per month. I have incorporated every energy/water saving recommended by TPU and even though my use has decreased by nearly 15%, my bill this month was higher than the one from the same time frame for the past 5 years.
    Oh, and for those that have asked how much Anderson and Casey pay, you should first ask if they even live in Tacoma. With their big paychecks, I’ll bet that their commute to work involves a bridge or two.
    Shame on them all. And shame on any member of the Council that votes to approve it.

  11. northwestchick says:

    Ive lived in Tacoma,Parkland,Lakewood,Sumner.etc. Tacoma Power sucks “the light” right out of you. None of the others I mentioned are anywhere near Tacoma’s rates, all very low. There should be a law on how high they can charge!!.. Enjoying your European vacations and your Jaguars are you?? Ahem!

  12. Add:
    If Bob Casey has not seen this “depth of review” of any budget during the last 7 years, I have to wonder “Why the hell not?” Has he not been paying attention? Have the TPU budget crunchers not been working as hard the past 7 years, or did they just not give a crap about doing the job in a meticulous fashion? What an incredibly stupid comment to make.

  13. TacomaTaxpayer98409 says:

    I agree with other comments, we always here “we are cheaper than other utilities”. OK, so tell me why we have some of the highest paid executives at TPU? The salary increases are ridiculous. They say we have to keep pace with other private companies in the same field? Where does the CIty of Tacoma want to be in comparison to others? i.e in the top 1/3 of wages paid compared to others? My company compares out pay to others and we are at 50% of the highest.

    In regards to vehicle purchases; TPU and City buy many every year. TPU has it set up where each department has money budgeted to put “in the bank” each year towards purchase of new vehicles at end of the life cycle set by TPU. When it’s time to buy new vehicles the crews come running like kids in a candy store to order the equipment they need/want. City gets really good prices on new vehicles, better that what we the taxpayers can buy a car (as long as they work with the state to get purchases with them) Phyllis Barrett brought this point up many times at City Council meetings in regards to police vehicles. Is it better to have money in current budget year go in the replacement fund or is it better to not do this then have to borrow money in 5 years to purchase? I have no clue.

    I wonder where the 20 layoffs are going to occur at TPU. How about some specifics? Tacoma Rail has lots of locomotives sitting their yard shut down; is it time for the City to look at selling Tacoma Rail again? This came up about 5 or 6 years ago and it stirred up a hornets nest. If TR is getting a fee for each car handled; why is BNSF allowed to bring cars into the TR yard? Shouldn’t TR be handling ALL cars in/out?

    I wonder if the Communications Manager/Spokesperson and her staff are safe from layoff or not getting a raise this coming year. After all, she is making $118,000 a year. And if that offends someone because I brought this up again, TOO BAD! I didn’t mention her name this time.

  14. My power/water/sewer/garbage averages $175 month summer, $325 month winter.

    As pointed out years ago in the Trib, there’s some ? about the honesty of their water readings. They base sewer/storm drain bills on either the Jan bill or the Nov & Jan bill (depending on whom you talk to). My water bill is ALWAYS way higher in January (over 9 years) then other months. I do NOT use more water in Jan. Everytime I’ve brought this to someone’s attention I’ve gotten a variation of the runaround.

  15. Forgot to mention I live alone.

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