Philomath’s construction of a $16 million water treatment plant will be paid in full. That means annual debt payments over a 15-year period will not happen. And it appears that the city will recommend that local water rates be lowered.
City Manager Chris Workman delivered the exciting news to the City Council during a June 30 special meeting. The city had received confirmation that it would receive $12 million from the state through an appropriations bill focused on rebalancing the state budget and distributing millions in federal funds that Oregon received from the American Rescue Plan Act.
House Bill 5006 included funding for water and sewer projects throughout the state, including the $12 million to Philomath and $10.5 million to Corvallis to help rebuild sections of the Rock Creek intertie, a water transmission system that indirectly benefits Philomath as a backup source.
Workman said the city has been able to save $4 million to go toward the water treatment plant project, which when combined with the grant, means the total projected cost will be covered. A project timeline shows that the city plans to begin construction late this summer on a water reservoir and next summer on the actual plant facility.
“I’m thrilled,” Workman said. “We’re talking about 15 years of debt at 2.5% to 3% interest that the city won’t have hanging around its neck. That’s great for Philomath homeowners and businesses; it’s great for the city.”
The City Council has raised utility rates over the past four years in anticipation of needing to make the large annual payments on the anticipated debt. Workman alluded that staff plans to bring to a future meeting a recommendation to the City Council to lower water rates.
Philomath had learned that a Safe Drinking Water Fund loan that had been offered to the city through Business Oregon was no longer available. Workman reached out to Rep. Dan Rayfield’s office for assistance with funding and provided a project summary sheet with dollar figures and an abbreviated slide presentation. The representative’s staff added it to the list of projects that Rayfield (D-Corvallis) was championing for the bill.
“Safe and resilient water infrastructure is critically important,” Rayfield said. “I’m proud we were able to get this across the finish line because this investment will ensure that water rates remain affordable for all Philomath residents.”
HB 5006, known affectionately as the “Christmas tree” bill, allocates funds to specific projects that are seen as critical to Oregon counties.
“It’s where our local representatives are able to advocate and push for projects in their respective areas,” Workman said. “Rep. Rayfield’s office, I reached out to them back in May when we found out that we weren’t going to be able to get our Safe Drinking Water Fund loan that we were looking at and were going to be looking at the Public Works Fund loan instead, which has a little bit higher of an interest rate.”
The bill passed the House 55-0 and the Senate 24-3 during votes on June 26.
Workman said an important factor was having a “shovel ready” project, as well as acting quickly to get the information to Rayfield’s office.
“I would anticipate we will be looking at other water projects on our water list; we will probably be looking at water rates and if we can look to reduce those water rates down,” Workman told the City Council about what to expect down the road. “As you recall, we’ve built those up over the last several years to get them up to make that annual debt payment for the next 15 years and that’s no longer needed. So, look for staff to bring some recommendations to you.”
Mayor Chas Jones and city councilors expressed appreciation for Workman’s efforts that led to the sizable grant. Jones also received thanks for sending emails of support. City staff, including Public Works, also contributed to the effort.
Jones said he received a note from Rayfield’s office acknowledging that Workman “put in a lot of effort and appreciated that Chris got over all of the information they needed over so quickly so they could get the project submitted and into the queue.”
Rayfield has a connection to Philomath through his staff, which includes Jack Lehman, son of City Councilor Matt Lehman, as his communications director.