Philomath City Council members unanimously agreed Monday night to postpone a decision on proposed utility rate increases after residents raised concerns about a tiered water pricing structure and the overall cost burden on families.
The council’s listening session, which lasted nearly 90 minutes, marked the culmination of a months-long study examining the city’s water, sewer and stormwater systems and how to fund necessary improvements, including a new water treatment plant with rising construction costs. However, councilors determined they needed additional information before moving forward with rate changes planned to take effect beginning in March.
The proposed changes would impact Philomath residents over the next two years. For customers with standard 3/4-inch meters, the base water rate would increase from the current $18 to $25 by July 2027.
Mayor Christopher McMorran said he had researched rates in other similarly-sized cities but found accurate comparisons difficult due to varying needs and rate structures. Despite the challenges in making direct comparisons, he expressed concern about Philomath’s position relative to other communities.
“I keep saying that if someone can come to me with a great solution, we will do it in a heartbeat,” McMorran said. “I am really concerned about the fact that we’re already near the top and this would probably put us at or even more near the top.”
The city had previously raised the base rate from $14 to $25 between 2019 and 2021 to fund a new water treatment plant, but reduced it back to $14 after securing a $12 million state grant that was expected to cover the entire project cost.
That water treatment plant has not yet been built, and costs have escalated. The city’s latest estimate places the project at $16 million.
Tiered system draws scrutiny
The most contentious element of the proposal involves a three-tiered water volume pricing structure. Currently, the city charges a flat rate of $6.55 per unit of water (748 gallons), with the average person using an estimated two units.
Under the proposed system, residential customers would pay $5.70 for usage up to five units, $8.55 for six to 11 units, and $11.45 for 12 or more units. The plan also includes a 75-cent surcharge for residences in areas requiring uphill water pumping, such as Neabeack Hill and Starlight Village.
City Manager Chris Workman, while recommending approval of the rate increases overall, expressed reservations about the tiered approach in his written recommendation to the council.
“The tiers unfairly place a heavier burden on large households, to the benefit of small households, with no actual consideration of conservation efforts,” Workman wrote, suggesting that the council reconsider a simple, flat rate for all water users.
Several councilors echoed those concerns during Monday’s meeting.
“I would rather just get rid of the tiers and make it even and fair — the same for everyone,” said City Councilor Diane Crocker. “When you have a family with four kids, they’re going to use more water than a family of two. I don’t think they should be penalized.”
City Councilor Teresa Nielson added, “If we’re going to do tiers, it has to be in a way that is not punitive or damaging to families.”
City Councilor Brent Kaseman questioned the complexity of the rate structure and asked why the city wouldn’t simply charge a flat rate for all units.
Public input shapes discussion
Four residents testified during the listening session, the third public forum held on the issue following a Nov. 15 Councilor Coffee event and a Dec. 4 virtual town hall.
Van Hunsaker, a Planning Commission member and former mayor, urged councilors to examine the tiers more closely. Grant Gardner expressed concern about the percentage increases over three years, challenged the sizing of the new treatment plant, and also suggested revisiting the tier system.
Mark Knutson said he believes most Philomath residents feel rates are already too high and doubts their comments would result in any changes. He suggested the city compare rates with similar-sized cities and base increases on the statistical middle ground. James Elias questioned the financial components of the proposal.
Two additional residents submitted email comments — one supporting the proposed plan and another favoring a volume-based approach.
McMorran noted that his research revealed a key difference between Philomath and other cities.
“I think what was helpful for me was the realization genuinely that the biggest difference I saw between our rates and the rates in other cities is that we are much more reliant on the usage charges than on the base charges,” he said. “A lot of cities have much higher base charges and much lower usage charges.”
Beyond water rates, the proposal includes increases for sewer and stormwater services. The most common sewer base rate would rise from $37.20 to $38.75 by July 2027. Stormwater rates for typical residences would jump from $3.35 to $10 by the same date.
Commercial and industrial facilities would see proportional base rate increases based on meter size, with volume rates increasing from $6.80 to $7.65 by July 2027.
Next steps before decision
City Councilor Spencer Irwin acknowledged the difficulty of the situation, noting, “Given the system that we have to work within, we have to be able to cover our plate … to be able to pay our bills.”
City Councilor Jessica Andrade suggested examining the inputs related to specific projects and questioned initial capacity needs at the new water treatment plant.
In the end, the council requested additional information from staff before making a decision, including:
- Inputs used to calculate costs.
- The percentage of customers in each tier.
- An analysis of tier limits and details of a potential two-tiered approach.
- The impact of stormwater rate increases on larger employers.
- Rate calculations for multi-residential buildings.
Workman said staff could revisit several components of the proposal, including the balance between base and volumetric charges.
“There’s still a lot that we can look at and some levers that we could still pull to bring that back to you,” he said. “There’s some time if you want to look at other options.”
McMorran emphasized that public input would influence the final decision, countering earlier suggestions that citizen comments don’t impact city actions.
“People definitely can and this proposal will change as a direct result of what people said tonight,” he said.
The initial rate increase is not scheduled to take effect until March, giving the council time to consider additional data before making a final decision.
