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City of Sunnyside's sewer rate increase kept to bare minimum

The Sunnyside City Council lowered the 2010 rate increase for city sewer customers at last night's meeting.

The city had approved a 15 percent rate increase in November 2008, but a current analysis of the debt service coverage indicated the 2010 sewer rate increase could be reduced to 10 percent and still meet debt service coverage requirements.

A requirement of the city's water and sewer bond ordinances is that a minimum debt service ratio of 1.25 needs to be maintained. This means that the net operating income of the water and sewer funds must be 25 percent greater than the annual debt service.

Sewer rates were increased by 15 percent in 2008 and 20 percent in 2009. Water rates in Sunnyside were increased by 6 percent in 2008 and 10 percent in 2009.

With the 10 percent rate increase in 2010 the sewer fund debt service ratio is 1.26. That healthy number is up from .91 for this year and .66 in 2008.

The same ordinance the city council approved last November called for a 4 percent rate increase for water users. This will increase city revenues by $80,000 and brings the water fund's debt service ratio to 1.14, just under the 1.25 threshold.

Sunnyside interim Finance Director Bob Noland told the council this wasn't something to worry about, noting the average amount of under-expenditures in the budget each year should allow the ratio to be met by the end of next year.

Because of this the water hike will remain at 4 percent and not be raised at this time.

Council voted 6-0 to amend the water and sewer ordinance.

Sunnyside Mayor Pro-tem Jim Restucci said he thought it was important for cities to take only what they need.

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