Water II, this week’s top story

Is a “utility bank” funding Ocean Shores? 

By Tom Scanlon

Editor, the North Coast News

An Ocean Shores businessman complains he’s paying $200 per month “for water I can’t drink.” His regret: “I should have built at Hogan’s Corner.”

A local resident says whenever her grandkids stay over, they gag when they take a shower.

And yet . . . Even with what everyone seems to agree is substandard quality, the water appears to be funding the City.

From 2000 to 2006, more than $6 million was transferred from the utility fund to the general fund.

In March of 2008, state auditors determined $1.9 million of that was “inappropriate,” and had to be repaid to the general fund.

Still, no change in rates was made.

At the end of 2008, there was enough in the utility fund for City Council to authorize a loan of “up to $200,000” from the utility fund to the Convention Center.

Mayor Dean Bunkers has explained the difference, that this must be paid back, as opposed to a straight transfer.

Even so, since there is so much of a surplus in the utility fund, doesn’t that imply the rates are too high?

According to Mayor Bunkers, there is more than $2 million in “reserves” in the utility funds. The sewer and storm drain utility funds have approximately $1 million each. Bunkers explained that keeping the storm drain utility at $1 million is necessary, due to a lawsuit. (The suit alleges property owners in Ocean Shores do not generate storm water runoff from their lots and do not receive storm water sewer services from the City.)

Bunkers said the other surpluses, $1 million in the sewer utility, and $126,000 in water, are a stand-by against rising labor costs in the utility departments “and other unknown emergencies.” 

Bunkers, it should be noted, does not set rates. He can advise one way or another, but it is up to the City Council members, who vote on any utility rates. And, for that matter, on any financing to up-grade the systems.

At some time or another during candidacies, every City Council member has promised to make the water better. Most have pledged to lower rates (or, at the least, to examine them).

Three enthusiastic new members joined the council in the last year. There was a study by a consultant, saying there was a way to lower water rates by January of 2009 AND start on up-grading the quality. There were meetings with the County, which said it could sell water from a new Hogan’s Corner well to Ocean Shores cheaper than the city could produce it on its own.

And yet . . . another year came and went, with no changes in rates, no improvements of qualities.

Each of the seven council members was sent this email:

“Council members: If I am correct (and please correct me if I’m not), all of you at one point stated as you were running for City Council that Ocean Shores residents pay too much for water/utilities, and need to have a better quality of drinking water.

With that in mind, please answer the following questions:

1) How is the authorized loan of “up to $200,000” from the utility fund to the Convention Center justified? (Some feel this is simply a reworded continuation of the previous cost allocation transfers, which “bankrolled” the city)

2) What, if any, plans do you have to either lower the rates, improve the quality, or both?

3) Is this issue still a priority?”

Peggy Berry, Bob Crumpacker, Garland French and Dick Skewis did not reply.

Dave Creighton, Nick Johnson and Mike Patrick answered the email.

Creighton’s response:

“1) The loan from utility fund is just that, a loan. This money would have to be paid back by convention center funds it is nothing like the cost allocation money that money was taken from the utility not borrowed. The cost allocation money was taken to offset a 1.3 million dollar shortfall in the budget and was used to pay for added employees.

“2) If and when the council makes a decision on what type off treatment it will use or use the county water from Hogan’s Corner, both of these options will bring a better quality water, and with our own system should bring lower rates or lower them some. Quality of water is of great importance to me and hopefully we will make a decision this month. It is my intention to hopefully make a decision before the end of this month. 

“3) This is still a huge priority to me, hopefully the rest of the council feels so as well.”

Johnson’s reply:

“You are right that when I ran one of the issues was the quality of the drinking water in OS. I did not run on the premise of lowering the rates as I did not have enough information or knowledge at that time.  I believe it is in the best interests of the citizens of OS to get the quality issue solved before tackle the price issue.

“While I was running and shortly after being elected, the City was in the midst of a trial run of using chemicals to treat the water in an effort to rid it of the color and odor.  We then tried a process of using micro-filtration. Shortly after completion of the first tests, the County came to us with the proposal of developing their well field at Hogan Corner and selling the water to the city.  We are still looking into that offer, but I must tell you that I have some serious concerns about costs, controls and quality of water at those wells.  This offer from the County, in my opinion, has slowed down the process of improving the water in OS as it distracted us away from doing our own improvements.

“At the same time, the City applied for and now has received permission from the State to expand our own well system.  This will allow us to use the higher water aquifer. This will do a great deal in eliminating the smell.

“The City Council has approved the use of a chemical process that will help with the color and purity of the water.  Now, we need to ‘pig’ the lines to help get rid of impurities and growths in the lines.  These two

processes will improve the quality of the water to a great degree.”

Patrick’s response:

“Answer to Question #1  The $200,000 interfund loan to the Convention Center as recommended  by Mayor Bunkers is appropriate in the sense that the Mayor is using a management tool to balance our budget.  The loan is different from the Cost Allocation issue in the sense that the city has the legal responsibility to pay back the loan at some point in time.  I am optimistic that when the economy improves that the funds will be repaid in full.

 “Answer to Question #2  I am confident that we are moving in the right direction to improve the quality of drinking water in Ocean Shores.  The issue is complex but I believe that some of the new technologies will be most helpful in achieving the goal of quality drinking water in our community.  We should not commit to a reduction in costs for drinking water until we know what the costs will  be in the future.

 “Answer to Question #3 Water quality is absolutely a priority and has been for some time, not only by me but by other members of the City Council and most certainly the community, whom we represent.”

 Ocean Shores residents are nothing, if not patient. Many seem to be thinking long-term, rather than “quick fix.”

Says local activist Lillian Broadbent:

“With the current financial difficulties and the costs of a new water system looming, lowering our rates today would at best be a temporary solution.  

“As long as the money I pay for water, goes to a long term solution that WORKS, I am willing to go with the current rates a little longer and am hopeful that a significant reduction in costs is on the horizon.”

Next week: Water and the North Beach.