Lebanon council declines proposed utility rate increase after multi-hour utilities briefing

City of Lebanon officials presented an extended review of the municipal water, wastewater and stormwater systems at the March 12 City Council meeting and then voted to disapprove a staff-drafted rate resolution for utilities. City staff warned that substantial capital work is coming — including a large wastewater-treatment-plant upgrade that staff estimate will require roughly $30–35 million of work, with the city’s share modeled at about $15.7 million in borrowing — but council members said they did not want to raise rates now while the city pursues state and federal funding.

The presentation from staff — led by Public Works Director Jason (last name not specified), Finance Director Brandon (last name not specified) and City Manager Ron (last name not specified) — walked the council through operational conditions, near-term projects and five-year financial forecasts for each utility fund. Jason said the water treatment plant “has produced 528,220,000 gallons of water” through February and described system-wide needs including 88.7 miles of distribution mains; Brandon presented multi‑year fund balance projections and a wastewater forecast that showed a growing capital shortfall without new revenue or outside funding.

Why it matters: Lebanon’s sewer and water systems are aging and regulated; staff said regulators will require upgrades to meet permit limits and to replace old equipment. Staff modeled scenarios showing modest, staged rate increases would push a fund-balance problem further into the future, while no increase could create pressure when construction and debt service begin.

Most important details - Water: Staff reported roughly 88.7 miles of distribution mains, median pipe replacement funding currently replaces only about 2,500–3,000 feet per year (a roughly 160‑year replacement cycle). Typical ductile‑iron pipe life is ~75 years, staff said. - Wastewater: Staff said the city treats roughly 835,000,000 gallons of sewage through February and that infiltration/inflow during rain events can more than double plant flows. The draft wastewater facility plan in progress produced a preliminary capital estimate that would leave the city responsible for roughly $30 million; staff modeled a $15.7 million loan as part of that project assumption. - Stormwater: The city maintains ~63 miles of storm mains and 52 miles of open-ditch channels; the storm fund generates about $200,000 a year for capital work. - Finance: Brandon displayed five-year projections for the water and wastewater funds. He said the wastewater fund currently holds approximately $14.4 million in reserves (city phrasing) while modeling that, without rate changes, debt service and capital could produce a shortfall toward 2030. He described a staff-recommended modest 2% wastewater rate increase this year, followed by 3% escalators in out years in one model.

Council action and reasoning: After public comment and staff discussion, a motion to disapprove the utility-rate resolution (Resolution 2025-02) passed. Several councilors said they preferred to continue pursuing intergovernmental grant and loan options — including active lobbying in Salem and Washington, D.C. — before asking ratepayers for further increases. Council members repeatedly framed the vote as a timing decision, not a rejection of the underlying infrastructure needs.

Public comments: Residents at the meeting raised the affordability impacts of new fees and rate increases. Resident Steve Smith said the new “city services fee” plus other recent increases felt like “death by a thousand cuts” for households on fixed incomes. Other speakers urged vaccination of public outreach and explained how lack of notice had contributed to confusion about rate proposals.

What happens next: Staff will continue finalizing the wastewater facility plan, pursue state and federal funding, and return to council with updated cost estimates and financing scenarios. The council directed staff to prioritize pursuing external funding and to return with more data rather than adopt the proposed rates at this meeting.

Ending: Council members and staff emphasized both the seriousness of the infrastructure needs and the council’s preference to avoid immediate additional rate burdens while external funding is sought. City staff encouraged residents to tour the water and wastewater facilities and to follow further meetings for updated proposals.