Pasco council approves steep water and sewer rate increases; connection fees delayed until 2027

The Pasco City Council voted 5–2 on Jan. 20 to adopt Ordinance No. 4804, approving a multi‑year increase in water and sewer rates and setting higher maximum connection fees for new development.

City staff presented a rate study that, as written in the ordinance, phases water rate increases of roughly 20.75% per year for the first three years and a fourth‑year increase of about 9.5%; sewer rates were proposed as an 8% increase each year over four years. Staff said the proposed maximum connection fee for a single‑family home with a 3/4‑inch meter would be $6,148 for water and $4,583 for sewer, and the ordinance delays connection‑fee implementation until Jan. 1, 2027, while rate increases would take effect March 1, 2026.

Director Sarah, who led the staff presentation, said the increases reflect a mix of replacement needs and capacity projects, including a full replacement of the aging Butterfield Water Treatment Plant and several capacity expansions. "Replacement is related to rate. Connection fee is driven by expansion," she said, explaining how projects were apportioned between rates and connection fees. Staff estimated remaining water capacity roughly equivalent to 7,200 single‑family units and noted sewer collection constraints in some areas.

City Manager Hector Stewart warned council that delaying approval of rates could put at risk a Drinking Water State Revolving Fund (DWSRF) low‑interest loan that staff recommended to help begin Butterfield improvements. Stewart said the loan included a forgivable portion and that the new rate structure was necessary to repay the remainder.

Developers and industry representatives urged the council to soften or phase the connection fees. "A full acceptance of staff's recommendation to implement the fee at the maximum would shock residential construction," said Sean Milligan, an owner active in local development. Matt Haier of the Tri‑City Association of Realtors asked staff to show how much capacity is needed in the next five years and to separate the near‑term capacity costs from long‑term system expansion.

Councilmembers divided over who should bear the burden. Councilmember Perales and others pressed for either phasing in the connection fees, grandfathering preliminary plats, or otherwise delaying the new charges so projects already underway would not face sudden cost increases. Councilmember Figueroa, who supported adoption, emphasized the city’s need to reinvest and to ensure growth pays for growth.

After extended debate and a failed procedural effort to separate the connection‑fee question, Councilmember Perales moved to adopt Ordinance No. 4804; Councilmember Figueroa seconded. The council adopted the ordinance in a roll call vote: Councilmember Okada yes; Councilmember Figueroa yes; Councilmember Hernandez yes; Councilmember Perez no; Councilmember Campos yes; Mayor Pro Tem Noem no; Mayor Charles Grimm yes (5–2).

Immediately after adopting the ordinance, the council approved Resolution No. 4681 to accept a $14,727,000 DWSRF loan (DWL31572‑0) to fund raw water pump station and electrical improvements at the Butterfield plant; staff noted roughly 35% of that award is forgivable. Staff said the loan acceptance depended on the updated rate structure.

The ordinance and the loan together set a timetable for staff to implement rate adjustments, process permit applications, and prioritize projects. City staff told council it will prioritize permit reviews for projects seeking to secure existing connection fees prior to the Jan. 1, 2027, fee implementation date.

The council directed staff to return with implementation details, clarified grandfathering or transition rules for preliminary plats, and acknowledged continued outreach would be needed as the increases take effect.