SEQUIM — On a split vote, the Sequim City Council gave the city’s Public Works Department the go-ahead to restructure the fee rates for the city’s water and sewer customers.

The council voted 4-2, with one member absent, after a Monday public hearing on the proposed ordinance to change the way the rates are structured.

The resulting rate changes will be made to the city fees and charges ordinance during the 2015 budget adoption, expected in November.

Residents will see changes in utility bills beginning in January.

During Monday’s hearing, Public Works Director Paul Haines said the city must soon raise its revenues by 4 percent a year to keep pace with inflation and to replace obsolete infrastructure.

The city had two choices, Haines said: Raise the current fees 4 percent across the board or create a new system that fixes existing inequities in the fee system and provides incentives for reducing water usage.

The city opted for the latter choice.

Council members Genaveve Starr, Candace Pratt, Ken Hays and Laura Dubois voted in favor of the ordinance, with council members Dennis Smith and Erik Erichsen voting no.

Councilman Ted Miller is on vacation.

Richard Miller, who owns property in Sequim, provided a spirited argument against the increases.

“It’s ridiculous you’d want to drop down to 600 cubic feet,” he said. “Even in drought-restricted California they allow 800 cubic feet.”

Miller said any family of four will be pushed into an upper tier.

The result, he said, will be a water bill of “hundreds of dollars for a family . . . a working family.”

Councilwoman Laura Dubois defended the plan, saying the rates have to go up and that it represents a more equitable rate structure than a 4 percent increase.

Councilwoman Genaveve Starr agreed, saying, “I think it’s imperative to reduce our use.”

The new plan replaces the current two-tier billing system for single-family residences with a three-tier system.

Every residential owner in Sequim now pays a $23.11 base rate for water, plus additional usage charges.

Those using less than 800 cubic feet per month pay less per gallon than those who use greater than 800 cubic feet.

Under the new rules, homeowners and multi-family residence owners who use less than 600 cubic feet per month — slightly more than 57 percent — would see no increase in their water fees.

Those using between 601-800 cubic feet per month — 10.5 percent — would see higher fees than those they pay now, Haines said.

Those using more than 800 cubic feet per month also would pay more.

Single family homes using 600 cubic feet today pay $27.93 per month and those using a high volume of 1,700 cubic feet pay $50.93.

Under the new plan, the same customers would pay $27.93 and $54.67 respectively in 2015.

Haines said he hoped the plan would encourage greater water conservation.

Conservation practices, Haines said, “stretch the available capital” by reducing future demands on the system.

Under the new plan, sewer rates for everyone on the Sequim system would rise by a minimum of 2.7 percent.

Single-family and multi-family residence owners also would pay an additional $9.23 per month if they are using more than 600 cubic feet of water per month.

Haines said because the water use data for determining sewer use is collected only from November through April, sewer customers can enjoy lower rates all year by conserving water through the winter.

Commercial and other users also will pay additional fees for sewer use under the new plan.

Haines said he and others in the Public Works Department have been working on the ordinance since 2011.

He said the plan is driven in part by Sequim’s unique circumstances.

He pointed out that Port Angeles, which recently adopted a flat rate for summer water use by homeowners, has plentiful water rights, while Sequim is located in a “dry prairie.”

He also said the plan is intended to alleviate “inequities” in the system.

Management Analyst Sarah VanAusdle provided data showing that residential customers in Sequim use 37.4 percent of the water provided by the city system, but pay 38.3 percent of the fees.

Commercial water users, on the other hand, use 18.9 percent of the water and pay only 17.6 percent of the fees.

Among the biggest current beneficiaries of the inequities are “public authorities,” including the city and the Sequim school system.

They use 3.2 percent of the city water, while paying 2.3 percent of the fees.

Under the plan, adult care facilities in Sequim would see significant increases in their water bills.

Currently, they use 5.6 percent of the city’s water while paying 3.2 percent of the total fees.

All three categories — commercial, public authority and adult care — would see an average increase of 2.69 percent in the base sewer service fee, dependent on water meter size.

They also would have higher fees for per gallon usage (above 600 cubic feet per month).

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Reporter Mark Couhig can be reached at 360-452-2345, ext. 5074, or at mcouhig@peninsuladailynews.com.