Spokane leaders have chance to design a fair, easy-to-understand water rate structure

October 20, 2011

After much public outcry and extensive media coverage of research published by Washington Policy Center, city leaders in Spokane have announced they are going to review and possibly replace the city’s ill-conceived five tier water rate structure.

The plan put into place by the city this year increases the cost of water as users hit certain levels deemed too high by officials. The five tier structure, at its highest rate, can cost homeowners 23 times more for the last gallon used than the first.

2011 Rates – Per Unit cost

  • 1-4 units – $.20
  • 5-10 units – $.45
  • 11-18 units – $.85
  • 19-45 units – $1.35
  • Over 45 units – $1.85

Each of those prices will increase roughly 50% by 2015 under a rate schedule just approved by the council, pushing even the lowest rate above 30-cents per unit.

The city claimed under the new five-tier structure roughly half of homeowners would pay less. But many homeowners say that’s not the case. The city has received more than 2,000 phone calls and emails from angry homeowners upset with a large hike in their bills. Further adding to the mess, some city homeowners are refusing to water their lawns – afraid they will be charged much more than usual. As a result, the city says its total water revenues are down.

City leaders in Spokane now realize their adoption of a five-tier structure was the wrong public policy. They now have the opportunity to adopt a fair, consistent and easy-to-understand rate price. Washington Policy Center, in our Analysis of Spokane’s Water Price Changes, suggested the city of Spokane adopt a flat rate for water, and an elevated flat rate for summer months when use is highest. This approach is active and successful in Tacoma and Boise.

Spokane’s flat rate structure doesn’t have to feature the same prices as Tacoma and Boise, but it can and should be revenue-neutral. To illustrate:

Proposed Spokane Water Rate Structure (per unit)

  • 1-10 units - $.30
  • Over 10 units (May-September) - $.90

Under the “30-90” example, a homeowner in Spokane during the winter using 10 units of water would pay $3.00. Under the current five-tier structure, a Spokane homeowner in winter using 10 units would owe $3.05. (Note: this number does not reflect rate increases set for next January)

Spokane homeowners use more water during the summer months, meaning a higher flat rate from May-September can be adopted. That adopted flat rate, under this illustration, would be $.90 for every unit over 10. For example, if a homeowner in Spokane used 19 units (14,000 gallons) of water during the summer months, their bill would be $11.10. Under the five-tier structure, a 19-unit purchase would cost a homeowner $11.20. 

The “30-90” illustration proves there is a common-sense, easy-to-understand approach available to council members and the mayor. Simply put, it would leave Spokane homeowners better-off, still incentivized to save water, but not punished if they can’t. Under such a structure, Spokane homeowners who have no choice but to use more water will not face an enormous price hike if they also choose to water their lawns. Further, it would likely relieve the fear of those homeowners now refusing to water lawns, thus resulting in additional revenue to the City of Spokane. 

Spokane city leaders have been getting an earful about water rates. A flat/elevated summer rate structure will send a message to constituents that they are listening.

Spokane homeowners have cut their water use 10% since 2001. They should be rewarded with a water rate structure that is fair and easy to understand.