City anticipates an increase in water rates through 2028
Monthly bills for users of Woodburn's water system will likely go up by 10 percent this year as the city increases water rates to cover a gap between system cost and revenue.
The Woodburn City Council will vote on a resolution June 11 that would cover the costs of operating the city water system and finish paying off a loan borrowed to construct three water treatment plants in the mid-2000s.
The City Council heard a presentation by Public Works Director Eric Liljequist and financial consultant Deb Galardi at its meeting May 14 laying out the city's options for increasing water revenue.
The Council favored a water rate increase for the next 10 years, frontloaded to increase rates by 10 percent for fiscal year 2018-19 (starting in July) and another 10 percent for 2019-20, with rate increases of 4 percent each year after that until 2028.
That translates to an increase from about $27 per month now to about $32 per month by 2020 for the average monthly water bill of a single family residence. The increase will continue until the average monthly cost is $45 in 2028. Sewer rates, which are currently about $45 per month, will not increase.
After the first 10-year period of rate increases would expire in 2028, the city discussed possibly implementing a rate based on yearly inflation to ensure a steadily increasing revenue stream. Most other cities in Oregon increase water rates steadily based on inflation, according to Galardi.
Woodburn's system development charges (SDCs), which are charges when a new water account is hooked up, would increase from $2,085 to $3,750 for a new 5/8-inch water service, the most common size of a single family home (larger meters will have higher charges). SDCs are fees paid by developers that can only be used to fund projects that expand the capacity of the water system. By law, they cannot be spent on operations and maintenance activities.
The only increase in water revenue has come from an increase in customer accounts of about 1 percent each year, but average use by customers has also gone down by about one-quarter of 1 percent due to conservation and more efficient appliances, according to Liljequist. Average yearly revenue from the water utility is stalled at about $3.6 million.
The city will need to spend millions on capital improvements as it replaces old pipes and prepares infrastructure for population growth as part of implementing the city's new Water Master Plan, which was updated this year.
The water rates that were in effect since 2006 have been sufficient to cover operations costs, but improvement projects in the new Water Master Plan will require increased funding, according to Woodburn communications coordinator Jason Horton.
Woodburn's population is expected to increase from 25,000 to 35,000 by 2037 and water use is expected to increase by 30 percent, according to the Water Master Plan.
The city's current storage capacity has room to grow, but the city's wells are losing capacity. The Troutdale Aquifer that the wells tap into is declining, while iron and manganese are building up in screens, reducing flow. A new well, well house and raw waterline piping will be constructed in the next few years and the city has added $1.6 million to the draft fiscal year 2018-19 budget for the project.
The city will also have to build additional pumping systems to keep up with growth, and replace cast iron and concrete water main pipes that are corroded or cracking from old age. The water master plan forecasts that $35 million in system improvements will be necessary over the next 20 years.
If City Council approves the final resolution to increase rates at the City Council meeting June 11, the increases would take effect in July.
Editor's note: This story has been updated to correctly refer to the council's decision as a resolution rather than an ordinance, and to update the definition of SDCs.