Commissioners could get power to increase water rates by over 40% during six-year period

Promising not to approve increases larger than needed, Oregon City commissioners unanimously approved sending a November ballot measure to voters asking for water-rate increases potentially as high as 6% annually over the next six years, along with a separate measure that would authorize the city to borrow funds to replace pipes.

Commissioner Frank O'Donnell was among the city's elected officials who reluctantly referred the measure to voters, saying he would have liked the city to be more upfront in ballot language to say that future commissioners could get the power to increase water rates by over 40% during the six-year period, if they chose compounding maximum increases of 6% (see table below).Rocky Smith

Commission President Rocky Smith said that Oregon City voters have approved several large tax increases lately, including the school bond in 2018, but he saw it as the elected officials' responsibility to at least ask whether voters would be willing to stomach additional costs.

"We can't continue to kick the can down the road, but this is a big pill to swallow," Smith said. "What we're asking for is what we need as a city and what we need to do. If the public comes back to us and says, 'This is not the right time, or we need to rethink it,' that's what we're going to do."

City Commissioner Denyse McGriff said the two measures' confusing language "muddies the water" by mixing talk of borrowing with water-rate increases. McGriff didn't take lightly voting to refer the increases to citizens on the November ballot, saying that ice storm and wildfire recently provided a "wakeup call" for Oregon City residents to approve rate increases now or end up in much more expensive and dangerous situations.

In addition to replacing water pipes that are more than a century old in many areas of the city, the measures would allow the construction of two more reservoirs or storage tanks, strategically located to prepare Oregon City for wildfire threats or future situations when power is down for days at a time, such as during February's ice storm.

"We can't continue to live for today and not plan for tomorrow," McGriff said. "I'm very keenly aware of different financial situations that have been occurring in our community right now, and all of us have been subject to some sort of cutback in one way or another."

OC Senior Engineer Patty Nelson said city staff and commissioners are both committed to minimizing the rate increases, although the ballot measure doesn't specify the rates, due to uncertainties in future construction costs and other factors. Nelson said that some of the language in the ballot measures is deliberately vague, but if voters approve the borrowing measure, it would lead to smaller rate increases.

"In borrowing, we're able to not increase the rate as much over the 3%," Nelson said. "It's to try to provide flexibility to the commission; it's a big investment and effort to go after the election, and so, in the event that we do not get authorization for borrowing, having an 'up to' amount allows us to increase the rates to a higher rate, which would allow us to pay for the improvements as we go, since we will not have the debt."

City Commissioner Adam Marl said he was impressed with the city staff's efforts in bringing together a lot of complicated factors.

"I appreciate the work being done here," Marl said. "I want to be cognizant of the full picture here that we're looking at several different rate increases, and I want the community to understand how important, how paramount, this one is specifically."

What's the maximum increase?

The following table shows how Oregon City commissioners could increase water rates by over 41% after six years, if voters approve up to 6% compounding annual increases. Sample annual $100 water bill could increase to $141:

Current water bill: $100

Year one increases to: $106

Year two increases to: $112.36

Year three increases to: $119.10

Year four increases to: $126.25

Year five increases to: $133.82

Year six increases to: $141.84

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