Philomath residents will see higher utility bills beginning July 1 with 10% hikes to water and sewer base rates and 5% increases for volume charges.
The Philomath City Council approved the recommended price increases during its April 14 meeting after learning from the city’s finance director that operating and capital expenses are on the rise, which includes a significant increase in costs related to the retirement program for public employees.
For a typical residential utility bill that based on its meter reading uses three units, the monthly bill would go up from $94.10 to $113.19 — an increase in that example of just over 20%. There are discounted rates for low-income customers.
“We know that any sort of rate increase is a challenge for folks,” Mayor Christopher McMorran said. “As it’s been said, costs are increasing and I think it’s important for folks to understand that the costs that are increasing are not costs that are under our control. It’s not like we’re building shiny new things all the time and just jacking up the rates and paying everyone a ton more. It’s things that everyone has to pay unfortunately.”
Finance Director Mike Murzynsky went through the various pieces of information that are reviewed each year — such as the consumer price index that tracks inflation and a universally accepted construction and engineering index. He also mentioned previously approved employee salaries and the Oregon Public Employees Retirement System increase.
In addition to the water and sewer price hikes, the street utility fee increases from $8.70 to $8.75 and the storm drain fee from $3.30 to $3.35 per month.
The Finance and Administration Committee spent time going through the numbers with Murzynsky prior to this week’s council meeting.
“I think we came to the conclusion that it was a reasonable rate increase to make sure that we’re able to provide what we need to provide without undue burden,” said City Councilor Spencer Irwin, who sits on the committee. “We’re mindful that it does change the water bill but given the rising cost of everything, it actually feels pretty reasonable.”
A utility rate study is underway for the 2024-25 fiscal year and those results will help the city plan for future costs, future expansion, capital projects and any borrowing needs. For now, the recommendations for the increases, Murzynsky said, helps maintain current funding for operating expenses and capital projects.
In a recommendation on the rate increases, city staff wrote, “As we all know, inflationary pressures are still prevalent throughout the economy. City operations do contend with this also. The CPI (consumer price index) is currently at 2.6% and there is an average PERS increase of 27.5% for this year. We hope that the utility rate study will be a help to overcome these two items.”
A motion to improve the new rates passed on a 5-0 vote with two absent.