Tracy Loew

Statesman Journal

This story has been updated with the audio recordings of the City of Salem Water/Wastewater task force. Scroll down to listen to the July 14, July 28 and Aug. 11 meetings.

Salem’s residential water rates would rise an average of 65 cents per month next year to accommodate a rate decrease for irrigators under a plan approved Thursday by a city water advisory committee.

The deal was reached in response to a request from Creekside Golf Course, the city’s largest irrigator.

Creekside’s owners, developers Larry Tokarski and Terry Kelly, said that without a rate cut, the course would fold, taking about 50 jobs with it.

“The reality is here that if the water rates are not changed significantly, the course will close. That’s a fact,” golf club member Kent Hunsaker told the committee, which advises Public Works Director Peter Fernandez.

Some members of the committee supported Creekside’s request, but balked at extending the deal to all irrigators, which pay the highest of the city’s eight rates.

“It’s not unusual to try to save or to create 50 jobs in this town forgiving taxes for years on end, for doing a whole variety of fiscal gymnastics to get them in,” said City Councilor Chuck Bennett, a committee member. “I’m not sure why in the case of a business like this we wouldn’t do the same kind of thing relative to this cost.”

But Fernandez said that would open the door to more special deals, undercutting the city’s carefully designed rate structure, which charges each customer class the actual cost of the water it uses.

And it wouldn’t be fair to cut a special deal for a private golf course while leaving out other, arguably equally deserving, irrigators such as the Salem-Keizer School District and cemeteries, which likely would follow with their own requests, Fernandez said.

“Anybody can come up with special requests,” he said.

In the end the committee voted to reduce rates for all 670 irrigators, from $4.24 per unit (748 gallons) to $2.97 per unit. Residential rates will be raised to make up the lost revenue to the city – estimated at $600,000 per year.

The route to the decision was circuitous:

At its July 14 meeting, the committee voted in favor of the plan, which would save Creekside about $60,000 per year. Creekside is the only Salem golf course to irrigate with city water.

The club spends about $300,000 per year on water, and had asked to be reclassified to either the commercial rate, at $2.19 per unit, or the industrial rate, at $1.54 per unit.

At its July 28 meeting, the committee reversed its decision after Creekside owners balked, saying other irrigators shouldn’t get the same deal and demanding a bigger discount.

“I appreciate the $60,000, but that won’t keep Creekside open, I can tell you that. It’s not enough. We need to have what we asked for, which was an industrial rate,” Kelly told the committee.

“The school district didn’t call you. And I doubt if there’s anybody else that called you. And now, I’m getting drug in with all these other people,” he said. “The city of Salem citizens are going to have their rates raised because we’ve included all these other people, and I don’t think any of the rest of them qualify. There may be a few, but deal with them when they show up on your doorstep asking for help.”

At its August 11 meeting, the committee re-instated the decision after Kelly testified that further calculations showed the deal actually would help keep the golf course open.

“We’re a lot closer than we thought we were,” Kelly said.

Fernandez will include the proposal in the annual rate plan he recommends to the city council.

Because four of the eight city councilors sit on the water advisory committee, it’s unlikely the council will reject the deal. City councilor Steve McCoid, who is not on the committee but is a Creekside resident and golf club member, came up with the proposal.

The council will hold a hearing on the rate plan Oct. 11.

Creekside’s owners announced in fall 2015 that the club was having financial problems, although they have not publicly disclosed exact figures.

In addition to requesting the water rate decrease, they also made a failed attempt to require members of the neighboring homeowners association to purchase social memberships; required one-time payments from golf club members; and plan to raise monthly dues.

They also have filed a pre-development application to turn the entire course into a 354-home subdivision.

tloew@statesmanjournal.com, 503-399-6779 or follow at Twitter.com/Tracy_Loew

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