Sandy City Council explores future water, wastewater rate increases
With a $65 million wastewater treatment plant project still looming on the horizon, the Sandy City Council has once again begun to discuss a future rate increase for water and wastewater services.
In January, the city implemented a 98% increase to the wastewater fee, increasing the average residential consumer's monthly bill by $24.44. This increase was deemed necessary after years of minimal increases in water and wastewater rates, and with a large project to renovate the wastewater system in the works.
On Nov. 16, Doug Gabbard, project manager with contractor FCS Group, presented councilors with two updated rate models with which to determine the next rate increase. One model operates under the assumption that the city receives a Water Infrastructure Finance Innovation Act (WIFIA) loan, which has favorable terms, and one operating as if it did not and has to operate on revenue bonds.
The best of the two options — accounting for a WIFIA loan — would mean a 13% increase in wastewater rates in the first year, effective Jan. 1, 2021, followed by smaller increases of 8%, 8%, 8%, 4%, 4%, 4%, 4% and 4% in years after. This forecast of increases runs to 2030. Without the WIFIA financing, the picture for the ratepayers is slightly different, with larger increases of 10% rather than 8% in the second and consecutive five years.
The favorable increase scenario, with WIFIA funding taken into account, would keep Sandy still in the lower tier for what cities charge for water, but push the city up onto the higher end for what cities charge for wastewater.
For the average ratepayer, receiving six CCF (100 cubic feet) of water per month, the change in cost is estimated to be about $3.25, taking them from a $24.89 payment to a $28.14 payment. In wastewater, the average increase will look larger, taking the average payment from $52.35 to $59.16, a $6.81 increase. The only cities researched that currently charge more than the proposed Sandy fee for wastewater are Oregon City and Lake Oswego.
The Council has yet to adopt the new fee schedule and these new rates, but the discussion at the Nov. 16 meeting made the increase seem inevitable.
Councilor Carl Exner posed the question of what would happen to the city if they only increased rates this year by 6%, citing existing financial hardship for Sandy residents as a reason to pull back.
"I'm really trying to be conscious with the hard time we've gone through in the past nine months," said Exner. "It's not especially significant, but it certainly adds to everything else we're experiencing."
Mayor Stan Pulliam countered Exner's concern with a comment about not "kicking the can down the road" for future elected officials and community members.
"I'd hate to leave future councilors and our neighbors in the predicament with our water that we were left in," Pulliam said.
The city won't know whether it has been approved for WIFIA funding or not until early next year, but the Council will be looking at the rate schedule again at an upcoming meeting.
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