Utility operating and net non-operating expenses (where "net non-operating expenses" is defined as interest income and other non-operating income less interest expense and other non-operating expense) increased from $572.8 million in 1994 to $668.6 million in 1998. This represents an average annual increase of 0.9% more than inflation.

• City Light expenses increased from $335.8 million in 1994 to $386.5 million in 1998. This rate of growth in expenses was an average of 0.6% per year greater than the general inflation rate. Depreciation and interest expenses went up due to an expanded capital program, and general operating and maintenance costs also increased. These increases were partially offset by net power purchase costs that rose by less than inflation over the five-year period.

• Water expenses increased from $59.8 million in 1994 to $82.5 million in 1998. This rate of growth in expenses was an average of 5.4% per year greater than the general inflation rate. Expenses grew faster than inflation due to start up costs for consolidating the City utilities’ customer service functions, a change in financial policies that resulted in paying off certain capital costs more quickly than before, and an expanded capital program that resulted in higher interest expenses and depreciation.

• Drainage and Wastewater expenses increased from $100.9 million in 1994 to $118.7 million in 1998. This rate of growth in expenses was an average of 1.1% per year greater than the general inflation rate. This increase was due mostly to increases in sewage treatment costs associated with the upgrade of King County’s sewage treatment system to secondary-level treatment.

• Solid Waste expenses increased from $76.4 million in 1994 to $81.0 million in 1998. This rate of growth in expenses was an average of 1.5% per year less than the general inflation rate. Renegotiating the utility’s longhaul contracts achieved lower costs, and interest costs and amortization expenses fell during this period. Interest costs and amortization expenses in this utility are largely attributable to the landfill closure costs incurred in the late 1980s. As the landfill closure bonds are paid off, interest expenses fall. And, since the annual amortization cost of landfill closure is constant over time, it declines over time in inflation-adjusted dollars.