When Bainbridge residents open their utility bills in January they will notice a few changes, the most obvious of which will be a significantly more expensive sewer bill.

As a result of the struggling sewer fund, the City Council decided to raise rates over the next five years. That raise comes coupled with a temporary increase of 111 percent to pay for the Waste Water Treatment Plant upgrades also passed at the Wednesday meeting.

Along with upping sewer rates, the council decided to hold water rates at their current levels and increase storm water rates by 2.5 percent next year.

The council explored options presented by FCS Group, a Seattle-based consultant, and its own Utility Advisory Committee. The UAC emphasized on all three utilities that it hasn’t had enough time to fully examine all impacts and would like to revisit utility rates soon.

Sewer

FCS Group recommended a 30 percent increase in sewer rates in 2010, with a 10 percent raise in 2011 and 2012. The report indicates that in 2013 and 2014, rates would not require further increases.

In November, the UAC recommended an alternate scenario, with a goal of alleviating some of the burden on ratepayers in 2010 and spreading charges over the other years covered in the 2010 to 2014 policies.

Instead of a 30 percent increase for 2010, the UAC suggested a 13 percent increase in 2010, an additional 23 percent increase in 2011 and a 19 percent increase in 2012. Over those years, the cumulative raise in sewer rates is nearly 67 percent, according to the FCS report.

The UAC concluded that seeking a smaller bond (3.1 million from 5.1 million) to repay, among other things, the interfund loan from the water utility to sewer, would allow the city to lessen the sewer ratepayers’ expenses.

Finance Director Elray Konkel said the city will go for a smaller bond to pay off $1 million of the interfund loan in 2010, in addition to financing the final $1.5 million upgrades to the Waste Water Treatment Plant. The rest of the loan would be paid off with a separate bond in 2011.

“Instead of getting the whole effect of finishing the plant and the financing in one year, you’re smoothing it over a two-year period,” Konkel said.

The council voted 5-3 to follow the UAC recommendations, with councilors Debbie Vancil, Bill Knobloch and Kim Brackett voting against it.

“I’m not real happy about supporting this ordinance, but I think we have to,” said councilor Kjell Stoknes, who voted in favor of the UAC-proposed rate increase. He cited concerns that without significant revenue increases, the city will be right where it is now when discussion of financing the Winslow Way reconstruction comes up again in 2010.

Water

The council voted 8-0 to retain water rates at current levels.

The water utility is the healthiest of three city-operated funds. Both FCS Group and the UAC concluded that current rates are high enough to satisfy all revenue requirements for the utility.

The UAC told the council that it needs more time to examine the options proposed by FCS and suggested the council freeze water rates and collection structure for 2010.

“They have looked at the water utility and saw that we would enjoy a surplus even with the expected expenditures,” Vancil said. “They would come forward with their recommendation in October of 2010.”

Councilor Barry Peters added that the UAC will also examine how charges are being allocated among customer classes.

Storm water

The storm water utility has received the least amount of attention during this process. Both the UAC and FCS recommended a small increase each year, not to exceed 2.5 percent. The council voted to pass the ordinance 7-1 after a public hearing in which no one spoke.

Knobloch voted against the ordinance, citing the lack of time given to the UAC to examine a utility that has some unanswered questions about how the costs are being allocated.

“I feel we should be stopping and giving our Utility Advisory Committee a clean, open-ended inquiry into how our utilities are being run, he said. “It’s time to stop raising taxes just to raise taxes every year.”

The 2.5 percent increase represents a council directive to up storm water fees by 2.5 percent, or the CPI, which ever was higher. Konkel said the 2.5 percent number stems from the overall inflation factors over the past 10 years.

The council’s decision to raise storm water rates only applies to next year and can be renegotiated by the next council.

“This ordinance only covers this year,” Peters said. “I’m personally quite content to only be acting on 2010.”