Hillsboro council approves water-rate increase to address $1 million shortfall; future debt could add $2 million a year

HILLSBORO — The Hillsboro City Council on second reading approved an ordinance to amend Chapter 13 of the city code governing utility rates and charges after staff told the council the water utility currently runs about a $1 million annual deficit and requires near‑term revenue adjustments.

City staff introducing the ordinance said the rate changes are intended to cover immediate operating shortfalls and begin paying for improvements to deliver reliable water service. "We have a deficit of about a million dollar a year," the presenter said, adding that larger increases tied to future debt-service obligations will be scheduled once those debt figures are known.

Staff also told the council that a regional water‑supply project will require substantial capital work. "A COA water supply district has warned us that they're going to be doing $50 million worth of improvements, of which $31 million is our share, which is going to result in $2 million a year of debt service just for us alone," the presenter said. Staff said those obligations are not yet due and the ordinance focuses on the city’s current revenue shortfall.

The staff description included a revised rate design that shifts toward a roughly 50/50 allocation of total system cost between residential and nonresidential users. Staff gave sample impacts: low‑volume residential customers would see increases of about $4–$9 per billing period; low‑volume businesses roughly a 30% increase; one very large industrial user would see its bill more than double while other large users would face increases up to about 70%. The presenter noted meter size drives base charges (examples ranged from about $41 to $221 for residential base charges depending on meter size) and described new volumetric tiers (for example, a low tier near $5.50 and a high tier near $10.50 per 1,000 gallons in the proposed structure).

The ordinance text presented to the council would update connection and transfer fees, establish the revised base and volumetric charges, include a separability clause, and provide for publication and an effective date. Council discussion and the subsequent vote were limited in the transcript; staff later said, "we just voted to increase the water rates," indicating the council adopted the changes. The transcript does not record a roll‑call tally in the meeting text provided.

Staff framed the increase as part of the city’s broader strategic plan goals to "build better infrastructure and deliver essential services," and said immediate operational priorities include adding manpower and equipment, installing receivers to read automatic meters from existing water towers, and initiating targeted repairs to reduce leakage and unbilled water.

Next steps cited by staff include publishing the ordinance per its provisions, continuing communication with customers about the change, and scheduling further rate adjustments once future debt‑service obligations are fully quantified.