Grants Pass council adopts phased water-rate increase to back new treatment plant

Grants Pass City Council voted 6–1 to adopt a phased water-rate increase intended to shore up coverage ratios and support debt service for the city’s replacement water treatment plant.

Jason Kenney, presenting the resolution, told the council the increase is needed after the city lost a FEMA grant that “eliminated $50,000,000 of funding” and that the council previously approved a guaranteed maximum price and tentative financing plan for the plant. “Adoption of the GMP provided council with cost certainty,” Kenney said, and the city’s consultants concluded additional borrowing could be handled with a “very minor rate increase.”

Kenney outlined three scenarios. The council chose Scenario 2, a phased approach that spreads smaller percentage increases over three years while preserving a lifeline tier at $0.81 per unit for low consumption. He said the proposed package combines changes to the base/commodity charge, a treatment plant replacement fee, and a potential increase in Urban Renewal Agency (URA) contribution in order to reach acceptable coverage ratios before bonding.

Councilors pressed staff on whether a larger, single-year increase would materially improve the city’s borrowing terms. Jason and the city’s bond advisor explained that the treatment-plant replacement fee and resulting coverage ratio matter more to lenders than a one-time percentage action, and that the phased scenario and the larger up-front option were “basically identical” in long-term fiscal effect.

Bridal Brown, a resident, urged the council to reject rate hikes and proposed shifting to higher base charges with lower unit rates to avoid rationing, saying, “The time to start doing it is tonight by voting no.”

Councilor Seth moved to adopt Scenario 2; Rick seconded. The roll-call vote was 6–1, with the council president voting no. Kenney said staff will proceed quickly with bond solicitations, which the city hopes to start in December or January, and will provide the council with updated financial numbers as the bonding process proceeds.

The council directed staff to return with implementation steps and related URA action if the council chooses to increase URA contributions to debt service. The decision changes rates prospectively; the treatment plant replacement fee remains a temporary charge tied to debt service and will sunset when the debt is retired.