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Staff projects two-digit wastewater rate increases; groundwater recharge would lower debt service vs other options
Summary
Staff presented preliminary rate models showing substantial near-term increases under all options but smaller long-term debt-service projections for the groundwater recharge alternative; staff recommended an initial 12% wastewater rate increase pending refined modeling.
A staff presentation to council examined how each wastewater alternative would affect utility rates and debt-service obligations.
Tyler, the city manager presenting rates and funding scenarios, walked council through preliminary modeling and multiple assumptions. He said the Sandy River option would carry estimated annual debt service of roughly $12 million once complete; the Gresham conveyance option would be higher (about $14 million); and the groundwater recharge alternative would be lower (about $10 million). "I would be recommending or am recommending that we move forward with that 12% [rate increase] in the very, very near future," Tyler said, noting these numbers are preliminary and that FCS Group will be engaged to finalize a detailed rate model.
Staff reminded the council that estimates exclude roughly $40 million the city has already spent and that the additional $14 million for collection-system work is included in the rate model assumptions. Many of the potential state and federal funding sources are reimbursement-based, which requires fronting cash to complete work and then seek reimbursement, staff said.
Council members asked staff to provide 5-, 10- and 15- year projections and to show how additional grant awards would change rate trajectories and system-development charges (SDCs). Tyler said he will return with refined modeling from an outside rate consultant before any formal rate-adoption action.
The presentation emphasized that while the groundwater recharge alternative shows the lowest modeled debt-service and somewhat smaller early-year rate impacts, all options will require significant near-term increases to avoid a single large rate shock later.
