Local residents can expect to pay more to the city for utilities beginning July 1 with the Philomath City Council’s approval Monday of a rate hike that for a single-family household of four people would add just over $9 per month to the bill.
Based on calculations provided by the city during the Feb. 26 meeting, an average family of four that uses two units per person for water and two units per person for sewer, along with storm drain and street utility fees, currently pays $147.30. That bill with those same usages would go up to $156.35 — which is an increase of $9.05 per month.
The approved rate structure for water and sewer customers on typical pipes that are three-fourths of an inch in diameter includes increases of 15% for the base and 2.5% in volume charges. For water, the residential charge of $13 for the base goes up to $15 and volume per unit goes from $5.30 to $5.43 — both rounded up to the nearest 5 cents. For sewer, the base charge goes from $25.85 to $29.75 and per-unit charge from $6.80 to $6.97 — again both rounded up.
The street utility fee increases from $8.45 to $8.70 and the storm drain fee from $3.20 to $3.30. (For a full rundown of all rate increases for other types of customers, click here).
“We’re recommending that we increase the base rates … that’s the biggest item — that’s what covers our operating expenses,” Finance Director Mike Murzynsky said.
Murzynsky said in an agenda item summary that the base rates have not covered those operating expenses for the last five years and to make up the difference, a 67% increase would be needed. That level of a rate hike is not realistic and it was determined that a 15% increase for the base and 2.5% for volume charges “would bring the funds into balance.”
The same percentages were used for sewer rates to battle inflation and continuing costs associated with capital improvement projects, such as replacing 1952-era concrete pipelines. Commercial and industrial rate hikes of 15% for base and 2.5% for volume were also approved.
Following the determination of the new water treatment plant’s final costs, the city plans to conduct a utility rate study with information to be used toward the creation of a new rate schedule, Murzynsky added.
Beyond water, sewer, streets and storm drain rates, no other fees will see increases.
The city’s Finance and Administration Committee reviewed the utility rates before advancing the recommendation to the City Council. Included in the information provided to councilors were comparatives for Lebanon and Newport.
The city reviews utility rates annually to make sure revenues remain in line with operating and capital expenditures and to help prepare the next year’s budget.
A few councilors expressed concerns over the rate hikes — Matt Lehman had questions on the base rate increases and Councilor Jessica Andrade opposed the level of the residential increases while requesting clarification in areas such as rates for the school district, multi-family housing and commercial operations.
City Manager Chris Workman said the recommended 15% increase in the base rates came down to water usage.
“Water usage per household is down … it’s been going down the last two to three years,” Workman said. “As the cost of water goes up and the cost of everything goes up, people are conserving water more. … Our expenditures have not gone up dramatically for the sewer or the water, it’s just we’re not selling as much water, which means our revenues have dropped. … We still have to provide the lines and the service and the maintenance and all of those things.”
The council tabled the utility rate discussion to go through the city’s Capital Improvement Plan, which is a list of various facility improvements and equipment needs that will be included in the 2024-25 budget. Workman went through several of the largest projects and purchases.
When the utility rate discussion resumed, Councilor Ruth Causey immediately made a motion to approve the recommended increases.
“In theory, I understand why these rates need to be what they are and also I think we’re doing a great disservice to the community by passing them,” Andrade said following the motion. “These are not equitable and I would like to see that change as soon as possible.”
After being challenged by Councilor Christopher McMorran on what changes she would make, Andrade said adding multi-residential to the single-family residential section and making commercial rates higher were her primary points. She also mentioned other possible strategies that could be implemented prior to the planned rate study.
“The reason I’m pushing on this a little bit is I don’t think any of us here love it … but the assertion that passing this is a disservice to our residents, I just don’t necessarily think that’s accurate or fair,” McMorran said. “I think being a million dollars in the hole or not being able to replace aging sewer lines is also a disservice to our residents.”
Andrade said she thinks the city could hold off and arrive at a plan — perhaps steeper rates for residences that use much-higher amounts of water or adjustments for commercial users.
Workman said the city doesn’t currently have the data to discuss those types of complexities within the rate structure and that the recommendations by the committee and finance director should be considered.
“Nobody’s arguing that this is the long-term solution but what we’re saying is for this year, this is the appropriate measure and it’s the least impact that we can have on our residents today that we feel is necessary to do today,” Workman said.
At that point in the discussion, Causey “called the question” which led to an immediate vote. The council approved the proposed rate increases on a 5-1 vote (Andrade nay, Diane Crocker absent).
