Bellevue projects repeated utility rate increases; staff proposes meter‑based connection fees and retiring DFCCs

Bellevue utilities staff told the Environmental Services Commission on May 7 that wholesale cost pressures from regional partners and the city’s capital and asset renewal programs create multi‑year rate drivers that will require careful rate design, expanded outreach and program choices for customers.

A staff presenter (S13) described the early 6‑year outlook and cited two dominant wholesale drivers: the Cascade Water Alliance’s updated long‑term supply program (which the presenter said revised member cost estimates and timing) and King County Wastewater Treatment Division’s 20‑year forecast tied to regulatory investments. For Cascade, staff said a revised member forecast reflects significant capital spending that contributes roughly 2.7–2.9 percentage points to retail water rates each year; for King County the presenter attributed projected double‑digit wholesale increases largely to regulatory projects addressing combined sewer overflows.

Staff presented headline numbers for retail impacts: the water utility’s forecasted annual increases are about 6.9% for the first two years, then higher mid‑horizon; the sewer utility’s early forecast showed about 9.9% for the next two years and higher years thereafter. Across the three pipe utilities, staff said annual increases for a typical single‑family combined bimonthly bill would range from 8–9% and that, focusing on 2027, a combined bill would grow by about $18 (staff said roughly $10 of that would reflect wholesale cost passthroughs). The presenter also noted that incorporating council‑approved sewer equity recommendations would add about $3 to the 2027 bill estimate.

Commissioners pressed staff on affordability and workforce impacts; staff emphasized that rate design and conservation programs can help customers control bills, and that the department plans public outreach, community meetings and transparent bill notices to explain trade‑offs.

Following the rate briefing, Assistant Director of Engineering Dave Baish (S15) presented a separate proposal to revise Bellevue’s utility connection charges. Staff proposed three primary changes: retire Direct Facility Connection Charges (DFCCs) and absorb unrecovered expansion costs into Capital Recovery Charges (CRCs); calculate water and sewer CRCs by water‑meter size (instead of fixture counts/single‑family equivalents) to cap charges and simplify administration; and change the CRC billing timing from appearing on a property’s utility bill (over up to 10 years) to collection at permitting (aligning with regional practice and allowing developers financing options).

Staff argued that retiring DFCCs would reduce upfront per‑connection costs—removing a significant affordability barrier for properties converting from septic—and that a meter‑based CRC would be a regional common practice offering clearer caps and incentives for conservation‑minded design. In fiscal analysis staff said connection charges generated about $5,000,000 last year while rate revenue totaled roughly $205,000,000; staff said modest reductions in connection fee revenue from the proposals could be managed without a measurable direct impact to rates.

Staff reported developer outreach (23 participants at a listening session including multifamily and affordable‑housing developers and trade groups) and said feedback favors simplicity and DSCC elimination; views on timing were mixed, with affordable‑housing developers preferring permit‑time payment while some developers requested payment flexibility. Staff will return to the commission in June for concurrence and plans to bring ordinance changes to City Council in Q3 or Q4 of 2025.

No formal vote was taken on the rate forecast or connection‑charge changes at the May 7 meeting.