Newberg rate review recommends 5% water increase; council hears $31 million oxidation-ditch plan
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Summary
Consultant and staff recommended multi-year utility rate increases (roughly 5% water, 4.1% sewer, 4.5% stormwater, 4% transportation) to fund $6.6M in near-term HB 2001 projects and build capacity for a $31M wastewater oxidation-ditch rebuild; no vote was taken — the item was informational and will return for future decisions.
Consultant Deb Galardi of Galardi Rothstein Group presented the city’s biennial rate review on March 2, recommending multi-year increases intended to cover capital projects, operations and debt-service needs.
Galardi summarized the committee’s work and recommended a 5% water increase alongside 4.1% for sewer, 4.5% for stormwater and 4% for the transportation utility. She said the recommendations assume use of reserves and systems-development charges (SDCs) to reduce the short-term rate impact and noted the city’s two-year rate process is intended to smooth larger investments over a longer planning horizon.
“Those projects total $6,600,000 over the next few years,” Galardi said, naming the portion of HB 2001 work expected in the near term. She added that a full water-treatment-plant replacement remains in the 10-year plan and will require additional finance planning.
City Manager Will and rate-review members described how the city expects to use a mix of reserves, internal short-term borrowing and targeted debt to manage the largest projects. On the sewer side, Galardi flagged a $32 million treatment-plant oxidation-ditch project and recurring infiltration-and-inflow work; staff said some sewer reserve capacity exists but the large plant rebuild will require careful financing.
“Part of the reason for this internal loan is deliberate so that we can then move money back to the water fund,” Will said, explaining the proposed internal transfers and the goal of avoiding excessive external borrowing.
Councilors asked about the consequences of delaying projects. Will warned that failing to fund necessary sewer upgrades could expose the city to state enforcement or construction moratoria. “If we keep letting that keep overflowing, we’re going to get fined by the state,” he said, adding that recurring sewage surcharges already require staff to divert crews for cleanups.
Staff also outlined a specific oxidation-ditch rebuild scenario: adding a third oxidation ditch, replacing piping and pumps, adding a second clarifier and expanding solids-handling ($31 million estimated). Will said a worse-case testing outcome could add roughly $7 million; that larger cost could not be cash-funded and would require a special council work session and further financing decisions.
Galardi noted the proposed rate increases would not fully fund the largest plant work and that the city will consider other funding sources, including SDCs, agency funding and borrowing; staff mentioned the possibility of a property-tax–supported general obligation bond for the water-plant debt rather than charging rate revenue for that portion.
No formal vote occurred; staff said the presentation is informational and that the oxidation-ditch project and related financing options will be brought back to council with more detailed materials ahead of an April briefing.