MASON COUNTY, Wash. — Mason County commissioners spent nearly 90 minutes on Oct. 6 reviewing staff recommendations to raise water and sewer rates, directing staff to revise assumptions for the county's 2026 budget and to return with updated financial impacts.

County utility staff told the commission they had included a 10% assumed increase for sewer rates and a 20% assumed increase for water rates in the proposed 2026 budget submission, citing revenue shortfalls that currently leave several utility funds unable to cover operating costs, debt service and planned capital work.

Those shortfalls, staff said, are driven by older infrastructure, new regulatory and testing requirements and planned capital projects such as facility-plan updates, pipe replacements and UV and filter work. The county also faces long-running debt on some systems and said grant and loan programs will be needed to address major capital needs.

"So staff is recommending a 10% increase for sewer utilities and a 20% increase in water," said Stephanie, staff member, while presenting tables showing current rates, customer counts and proposed capital projects. She walked commissioners through system-by-system summaries for North Bay, Russellwood, Beards Cove and Belfair, including proposed capital expenditures and grant assumptions.

Why it matters: several of Mason County's small utilities are running operating deficits and have limited reserves. Without additional revenue, staff said the funds will be drawn down to pay near-term capital and debt obligations, which risks leaving the county unable to match grant opportunities or to maintain required service levels.

Staff and commissioners reviewed specific system assumptions and the likely customer impacts for 2026:
- North Bay sewer: staff projected a 10% sewer increase (from $120 to $132 per month in the budget assumptions), about 1,400 ERUs and capital items including filters, roof repair and lift-station work, producing an operating budget just under $1.9 million and proposed capital of about $1.0 million.
- Russellwood: staff noted the water base had previously risen from $44.32 to $55 and that many customers fall into tiered usage bands. For the county's budget assumption staff proposed a 10% sewer increase (raising a current sewer base of roughly $118.15 to about $129.97) and had proposed a 20% water increase; commissioners gave direction to move Russellwood water and sewer to 10% for 2026 and to revisit growth/capacity information before further changes.
- Beards Cove water: staff's packet showed the base at $44.32; staff had proposed a 20% increase to about $53.18. Commissioners directed staff to pursue an 8% increase while increasing the tier-step charges (the commission asked staff to return with specific tier adjustments), citing the county's differing tier structures across systems.
- Belfair sewer: staff proposed a 10% increase (from $110.54 to about $122.25) and listed planned capital including membrane replacement, UV upgrades and potential pond repairs; commissioners supported a 10% assumption for Belfair.

Commissioners discussed multi-year predictability. Staff recommended years 2'through 5 be indexed to CPI-U with a floor of 3% and a ceiling of 5% (and an exception noted for Russellwood). Commissioners instead gave direction that would set year 2 at a 5% across-the-board increase and then revert to a CPI-based annual adjustment constrained by a 3% to 5% range thereafter, to create predictability while limiting year-to-year shock.

Commissioner Sharon Trask (Commissioner, District 3) said the moderated approach balanced customers' concerns with the need to shore up fund stability: "Because of that I will agree with that. Yes," she said after a round of negotiation among commissioners.

Commissioner Randy Netherland (Commissioner, District 1) and Commissioner Pat Tarswell (Commissioner, District 2) also engaged in detailed line-by-line questions about ERU counts, reserve targets and debt service schedules. Commissioners pressed staff for clearer capacity and facility-plan triggers for systems such as North Bay, where staff said the 85% of design flow is a trigger for planning expansion.

Staffers and commissioners also discussed specific budget mechanics and funding sources: the county is pursuing grant funding for capital projects (staff referenced approximately $420,000 identified for certain water system upgrades and larger grant opportunities under discussion) and noted previous use of REET/other sources to support sewer funds. For Russellwood sewer, staff said they expect to request a $135,000 general fund contribution in 2026 if other sources cannot be used; commissioners asked staff to confirm restrictions and eligibility before finalizing that ask.

Richard, staff member, summed up the value of the financial detail: "I appreciate your numbers. I'm a numbers guy," he said, adding that clear spreadsheets help the commission explain the need to customers.

Customer impacts and equity: staff said a majority of customers in Russellwood (about 63%) pay the base rate and that tiered rates shift larger increases to higher-usage customers; the commission asked staff to revise tier breakpoints and run scenarios that show household impacts. Staff presented counts of senior tax exemptions as a rough proxy for older households in each service area: 34 in Beards Cove, 60 in North Bay, eight in Russellwood and none in Belfair, and commissioners discussed outreach and communications to vulnerable households.

Debt and reserves: staff presented fund-level summaries showing revenue insufficient to cover operating and debt service in several funds without rate changes or new funding. For example, North Bay had revenue projected at about $2.4 million against operating expenditures and debt that exceed that revenue; Russellwood showed planned capital and debt that would reduce reserves if not matched by new revenue or grants.

Next steps: commissioners directed staff to revise the 2026 rate assumptions consistent with the board's guidance (Russellwood water and sewer at 10% for 2026; Beards Cove water at 8% with tier adjustments; North Bay at 8%; Belfair sewer at 10%; year 2 at 5% across the board; CPI-U thereafter within a 3%--5% range), to model customer impacts and to return to the board with updated budget effects and specific tier proposals. Staff also said they would follow up with the county auditor's office and the general-fund staff on whether a direct general-fund contribution to Russellwood is permissible under funding restrictions.

Votes at a glance
- Agenda adoption: motion to adopt the agenda as presented passed by voice vote.
- Minutes approval: motion to approve the Sept. 16, 2025 regular minutes and Sept. 22, 2025 briefing minutes passed by voice vote.
- Action agenda adoption (which included items 8.1'8.9 as listed in the packet): motion to adopt the action agenda passed by voice vote.

All three procedural motions were approved by unanimous voice vote at the meeting; no roll-call tallies were recorded in the transcript.

The board asked staff to return with revised numbers and clearer facility-capacity triggers, and to prepare public-facing information showing how the proposed changes would affect typical residential bills. Staff said they would update the budget documents and return at the next briefing.

Sources: county presentation slides and staff remarks during the Mason County Board of Commissioners pre-budget utility rate workshop on Oct. 6, 2025; board discussion and direction recorded in the official meeting transcript.