The Philomath City Council unanimously approved new utility rates early this week, setting in motion a series of phased increases for water, sewer and storm drain services that will roll out between July 1, 2026, and July 1, 2027.
The 7-0 resolution vote came three months after the council delayed its decision to wait for actual construction bids on the city’s new water treatment plant rather than rely on engineering estimates. The rate package follows recommendations from Raftelis, a consulting firm hired by the city to complete a rate study, with modifications directed by the council.
For residential customers with a standard 3/4-inch or 5/8-inch meter, the monthly water base charge will climb from the current $18 to $21.50 on July 1, then to $23 on Oct. 1, $24 on Jan. 1, 2027, and $25 on July 1, 2027. A new low-income rate set at 70% of the base charge will also take effect.
The volumetric water rate shifts to a two-tier system — a change from the three-tier structure floated in January. Under the approved plan, the first eight units of water will be billed at $5.25 per unit, down from the current $6.55. Consumption of nine units or more will be charged at $9.25 per unit. One unit equals 100 cubic feet, or 748 gallons.
Sewer rates also will rise. The residential monthly base charge increases from $37.20 to $37.55 on July 1 and reaches $38.75 by July 1, 2027. The volume charge jumps from $8.75 per unit to $8.85 on July 1, rising to $9.15 by the final step.
The residential storm drain fee — currently $3.35 per month — doubles to $6.70 on July 1 and climbs to $10.05 by July 1, 2027. City staff have attributed the storm drain increases to new state requirements for treating storm water before it enters rivers and streams.
The street utility fee, which is separate from the utility rate study, will increase 3.56% based on the Engineering News-Record index used for system development charges. The residential street fee rises from $8.70 to $9.10 per month.
City Manager Chris Workman told the council the rate package represents a careful effort to minimize impacts on households.
“For the amount of time and effort we put into this, for most households, we’re not talking about a huge increase,” Workman said. “I mean, if you’re using a ton of water, then there’s some expectations that you’re going to see the increases. But I think when you look at your low use — 13, 14 units in the summer and three, four, six units in the winter months — for a lot of households, they’re going to be single-digit increases per month.”
Billing examples provided in the council’s meeting packet show that a low-usage residential customer who used three units of water in December 2025 would see a monthly bill rise from $113.20 to $118.35 under the July 1 rates — an increase of about 5%. A high-usage customer billed in July for 41 units would see a bill go from $432.10 to $519.10, a 20% increase driven largely by the second-tier volume charge.
“We put extra effort in this year, spent a lot of money for a report from Raftelis to do a deep dive to look at our actual costs — what does it cost us to run these utilities, where’s the money coming from, how do we distribute it more evenly?” Workman said. “And I think we’ve done a lot of really good work to try to make it equitable, to try to make it so it’s sustainable.”
The new rate structure includes a low-income provision offering a 30% discount off base charges for water, sewer, storm and street fees.
“We recognize that there’s households that this is going to hit harder than others,” Workman said. “And based on income — not just the number of people in the household — but based on household income, we’ve made some adjustments to our rate schedule that I think are going to really help people.”
Councilors acknowledged the difficulty of raising rates but said the city had no real alternative.
“The other thing that we have to understand is that if we don’t make some kind of change, then we’re borrowing money and it compounds the problem and it gets even more expensive the next time that we have to revisit this,” City Councilor Spencer Irwin said.
City Councilor Teresa Nielson said the council’s deliberations demonstrated its commitment to residents.
“It shows our concern for our community,” Nielson said. “This has been such a hard thing to process through that, it has really been blood, sweat and tears as we’ve thought about it.”
Mayor Christopher McMorran was blunt in his assessment.
“I’ll just say that this sucks. This is not what anyone wants to do but I do feel like we have looked under every rock and examined every line of every spreadsheet three times and asked for more spreadsheets to the point where I feel like Mike wants to quit,” McMorran said, kiddingly referring to Finance Director Mike Murzynsky.
McMorran added: “I think this is what public engagement and public process is supposed to look like even if it doesn’t end at a place that everyone feels great about.”
The resolution makes policy changes to the payments, underground leaks and adjustments sections of the utility code. Under the new policy, customers notified of a meter leak by the city must begin repairs within a week of notification. Customers who ignore notifications for two weeks will not be eligible for a billing adjustment, which can be up to 50% of water lost.
Workman said the rate review is an annual process but this year required a deeper look.
“It’s never a good time to raise utility rates but every year, you’ve got to look at those, you’ve got to make the adjustments,” Workman said. “We put extra effort in this year … I think we’ve done a lot of really good work to try to make it equitable, to try to make it so it’s sustainable.”
Workman said he was pleased with where the numbers landed given the scope of upcoming projects.
“I think you’ve done a good job of holding our consultant and holding staff to really look at this and see what is the minimal amount that we need to do to actually make these increases and I think we’ve been successful of that,” Workman told councilors. “At the end of the day, households in Philomath and businesses in Philomath are going to see some increases but for a huge water treatment plant going in and the streets that need done and inflation and what it’s done, I think we’re looking really good. I’m really pleased with where we ended up with the numbers here.”
The first phase of the new rates takes effect July 1.
