Cowlitz County reports small equipment-rate rise, proposes 4% water and sewer increase pending 2026 budget adoption

Cowlitz County Public Works and Finance staff told the county commissioners on Thursday that routine updates to equipment and utility fees will be included in the 2026 budget package, with small changes recommended now for the board's information. Public Works presented proposed equipment (ER&R) hourly rates that average about a 2% increase and recommended a 4% across-the-board increase to water and sewer rates for 2026. Kathy Funk Baxter, Cowlitz County finance director, told commissioners the fee-setting items were being presented for information now and would be formally adopted with the county's overall budget resolution.

The equipment rates cover the county’s internal equipment-revolving (ER&R) fund for road vehicles and other heavy equipment. Sean Roey, Public Works, described the methodology: each vehicle category (dump trucks, graders, loaders, water trucks and others) is calculated independently using a five-year rolling average of maintenance costs, a three-year average of hours of use and an estimated replacement cost spread across a 20-year reserve period. Roey said those inputs (maintenance, usage hours and replacement cost) are summed, fuel is included, and the total is divided by average hours to produce an hourly charge. He said the result is “about a 2% across the board” change, with some individual categories higher or lower depending on recent maintenance or use patterns.

Roey also said those ER&R rates are used for internal chargebacks between the county’s road fund and ER&R, and they are the same rates the county would charge other governmental agencies that rent county equipment (he gave the example of the city of Castle Rock borrowing a chipper).

On water and sewer, Public Works recommended continuing a 4% increase for 2026. Kathy Funk Baxter and Roey said the county has used smaller increases in the past (3% historically until last year) but moved to 4% in 2025 on residential accounts and a larger increase for industrial customers. Roey said the county plans to keep the 4% while it completes a formal rate study and updated capital plan — work the county said is needed after receiving ARPA funds and embarking on several major capital projects (meter replacements, treatment-plant work and low-pressure-zone fixes). Roey said the study and capital plan will be used to develop a long-term rate structure tied to capital needs.

Finance staff provided basic counts and service areas for the rates being discussed. Roey said the county has roughly 1,250 water connections and about 800 sewer connections affected by the proposed increase and that the portions of the county most affected include Riderwood, Woodbrook, the Toutle/Cowlitz Highway area, Toutle River Drive and Camelot. Staff also said non-rate fees such as connection fees, charges for new customers, damage fees and system development charges (SDCs) were unchanged for 2026.

County staff emphasized that the items presented Thursday were informational and part of the budget development process. ‘‘As part of the budget process, we present those today, but you formally adopt the fee rates when we put the entire budget together,’’ Kathy Funk Baxter said. Roey noted the county has used the current ER&R workbook and methodology since about 2012.

If the board wishes to change the rates staff presented, any formal action would be taken during the budget hearings and adoption process scheduled later this year.