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Rate Hike Irks Indy Business

INDEPENDENCE -- At least one Independence business is feeling the pinch from the recent utility rate increases.When the city OK'd a deferred 5 percent water and sewer rate increase in July, rates jumped 10 percent from the beginning of the year.For some businesses, 10 percent is nothing to complain about too much. But for businesses with high water usage on top of high electricity usage -- say a movie theater -- it can be daunting to make up those costs.That's the situation Independence Cinema currently finds itself in. And without raising ticket prices, something the cinema's owner says it's unable to do without losing business, the cinema is inching ever closer to the red."It adds up to $3,600 per year. Money is made in pennies but lost in hundreds," Elie Kassab said. "We provide services to smaller communities. If our costs keep increasing, we cannot be competitive with the big chains. It makes it very tough on us."Kassab is the president and CEO of Vancouver, Wash.-based Prestige Development, which owns Independence Cinema.The rate increase was part of a scheduled increase set before the water and sewer utility rate increases in July 2011.In December 2012, the city council approved spreading the increase over a period of seven months: a 5 percent increase in January, the other 5 percent in July."We needed to budget for it. Ten percent is a huge jump in one expense," Kassab said. "We are down to a minimum with employees. Frankly, we don't know what to do."Prestige Development owns two other smaller theaters in the Pacific Northwest -- one in Sandy and the other in Battle Ground, Wash.Of the three theaters, Independence Cinema has the highest overhead costs, largely due to rate increases, Kassab said.Kassab sent a letter to the Independence City Council, notifying it of his displeasure with the increases.The city has yet to respond, but City Manager David Clyne said occasionally raising rates is an unfortunate necessity."Nobody likes rate increases. We understand everybody is on tight budgets but we're doing what we can to make it work," Clyne said. "I think people understand that utility rates will always go up. What we're trying to do is minimize those increases."

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