Clean Water Services presents 2026 rate options; commissioners ask staff for a 3% scenario and savings analysis

Clean Water Services (CWS) staff presented the utility’s 10‑year financial forecast and a proposed 4% rate increase for the 2026 fiscal year during a joint Washington County Board of Commissioners work session on June 3.

Kathy Leader, CWS chief financial officer, told commissioners the district maintains a 10‑year forecast, updates it annually, and uses it to evaluate rate needs and debt issuance. Leader said the forecast currently assumes a 4% annual increase for combined sanitary sewer and stormwater rates and that, under the forecast, capital investment needs will rise in the near term because of large projects in the East and West basins, laboratory upgrades and conveyance work.

The nut of the discussion was whether to proceed with a 4% increase that staff said was needed to protect reserves and fund planned capital work, or to seek a lower near‑term increase while directing staff to find operational savings or use reserves. Commissioners repeatedly asked for more analysis of trade‑offs, including how the capital program could be sequenced or how debt issuance might smooth rate impacts.

Leader said the district’s adopted financial practice has built reserves to avoid sharp rate spikes and pointed to recent bond‑rating strength from Standard & Poor’s and Moody’s as evidence of fiscal management. She presented scenarios showing the cumulative revenue impact of choosing 3%, 2% or 0% instead of the proposed 4% for the coming year and noted that the district’s capital program is substantially larger than historic averages — the forecast showed capital investments moving from roughly $50 million per year historically to average levels closer to $100 million per year in coming years because of required projects.

Commissioners pressed for more detail about the customer‑level impacts and assumptions used in projections. Leader and staff said a finalized cost‑of‑service study and allocation of regional and local components will be complete later in the year and will underpin new rates and EDU counts used to calculate customer bills. She said the cost‑of‑service work will be used to prepare final rate proposals and allocations in the fall.

Several commissioners asked whether the organization could find 1% or more in ongoing efficiencies and challenged staff to develop a plan to achieve a long‑term trajectory closer to 3% rather than 4%. Commissioners also discussed using reserves for one year to reduce the immediate rate increase while the organization pursues operational savings; staff said that approach would lower reserves in the short term and would require sequencing of capital or use of unfilled positions.

Near the end of the discussion the board directed staff to develop an alternative scenario: present a rate proposal that results in a 3% increase for the coming year, accompanied by an analysis that identifies where roughly $1.8 million of savings could be found or how the shortfall would affect reserve balances and capital sequencing. Staff said they will return with cost‑of‑service allocations in the fall and that the official proposed rates and charges will be set for a public hearing June 17; commissioners asked staff to bring the 3% scenario and any high‑level savings options prior to that date so the board could consider it during the public process.

Commissioners also asked staff to continue work on a low‑income affordability program and to bring more public education about how sewer and stormwater bills are calculated and how CWS relates to city billing. Several board members said they wanted the rate discussion and any proposed changes to be supported by transparent analysis and to avoid ad hoc decisions that would risk larger rate spikes later.

No formal vote was taken at the work session. The board directed staff to return with a 3% scenario and savings analysis ahead of the scheduled June 17 rate hearing, and staff confirmed they will present the updated materials and the final cost‑of‑service allocations later in the calendar year.