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Portland council approves first reading of multi-year water, wastewater and drainage rate increases
Summary
City Council approved the first reading of Ordinance 2305, a plan that raises water and wastewater rates 7% in the first year and 6% in each of the next four years, adjusts tap and inspection fees, and increases the drainage fee to shore up utility finances and planned capital work.
Portland City Council on Feb. 4 approved the first reading of Ordinance 2305 to raise water and wastewater rates and update related fees, a step city staff said is necessary to meet near-term operating needs and a five-year capital plan.
City utility staff told the council the ordinance calls for a 7% rate increase in the current year and 6% increases each year for the following four years. Under the proposed rates the residential minimum water charge would rise from $22.10 to $23.65 and the minimum wastewater charge from $45.32 to $48.49. The average household that uses about 5,200 gallons would see its combined water-and-wastewater bill rise roughly $7, from about $100 to about $107 under the first-year change.
Staff said the adjustments are intended to preserve the utility system’s financial targets — including a 180-day operating cash target and a 1.25 debt-service-coverage target required by the city’s utility bond covenants — and to finance planned capital projects. Those projects include design of a wastewater treatment plant, Hunt Airport drainage outfall work, Nicholas Lift Station reconstruction and 181 wastewater line rehabilitation. Staff reported that without rate increases projected revenues would fall below expenditures over the five-year planning window.
Utility staff also proposed changes to tap and meter fees (to cover higher installation and inspection costs) and a $2-per-account increase to the drainage fee, which was last set at $3 per account in 2010. Staff said the drainage fund currently generates about $340,000 in revenue and that upcoming debt service requirements will exceed $450,000, prompting the fee increase to cover debt obligations related to the Hunt Airport drainage project.
Council members asked about how recent water-meter replacements and drought restrictions affect consumption and revenue estimates. Staff said the meter program has been partially deployed and that early data showed an increase in measured consumption — roughly 10% in months where a majority of replacements occurred — but cautioned the sample is incomplete and billing is produced one month in arrears. Staff said the city expects to finish meter replacements and integrate online meter services within several weeks after final installations so residents can monitor usage online.
Council members also asked whether anticipated rate increases from the San Patricio Municipal Water District and Corpus Christi (including potential costs from a desalination project) were included. Staff said the current model does not assume future desalination-related increases because those wholesale rates have not been published and would require a reassessment if and when they are set.
The ordinance passed its first reading; the council set a second reading for Feb. 18. City staff said additional public notices and staff reports will accompany the second reading and final vote.
