Finance team outlines utility rate pressures; council asks for smoothing options in September

Redmond finance and public‑works staff used the July 28 study session to give council a first look at the city's utility systems and the financial pressures shaping upcoming rate decisions. Interim Public Works Director Chris Stenger described the three core systems—water, wastewater and stormwater—saying the city maintains roughly 360 miles of water main and that stormwater infrastructure manages about 11,000,000,000 gallons of runoff annually. Stenger estimated total utility assets in the billions: "Our estimates right now is about 3,500,000,000 for the utilities alone," he said.

Amanda Balzer, policy and strategy manager for utilities, highlighted aging infrastructure, noting many pipes approach a 50‑ to 75‑year life expectancy and that some neighborhoods are hitting median install dates near that threshold. Staff described mitigation steps underway, including lift‑station rehabilitation, PFAS treatment feasibility work and combining pipe replacements with pavement projects to capture multi‑benefit outcomes.

Director Kelly Cochran and deputy director Nara explained utilities operate as enterprise funds and must be self‑sustaining; they called out external drivers of rate pressure—King County wastewater treatment costs and Cascade Water Alliance supply costs—and said those partners' adjustments are the biggest near‑term unknowns. Cochran outlined the department’s plan: finalize a revenue forecast by the end of September, complete cost‑of‑service work and deliver rate‑design options and an affordability analysis to council for decisions this fall.

Council members repeatedly asked about protections for low‑income residents and assistance programs. Cochran said the city maintains a low‑income discount for seniors and people with disabilities (50% reduction on the utility bill) and partners with HelpLink for ratepayer assistance. Staff committed to provide scenario options for smoothing rates, compare Redmond's position with neighboring jurisdictions and bring back recommended choices in September.

The council did not take formal votes but directed staff to return with final forecasts and options for council action in the normal budget schedule.