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Council split on multifamily rate cuts as staff warns of capital shortfall
Summary
Councilors praised a separate multifamily customer class that would lower apartment bills but split over whether the city can afford reduced revenue; staff said Option 1A could be sustainable but would lower capital spending and asked for time to model long‑term consequences.
Staff described the multifamily breakout as “the first time ever that we've recommended a decrease in multifamily rates,” a change intended to correct a reverse subsidy that had previously placed higher per‑unit costs on multifamily customers.
Councilor Johnson said lowering multifamily charges right‑sized a longstanding inequity: “This is a historic injustice where … multifamily customers are paying significantly higher to subsidize single family users.” Several councilors welcomed relief for renters but asked for more analysis on whether landlords would pass savings to tenants and how revenue reductions would affect capital projects.
City staff said the Option 1A multifamily reduction would lower annual revenue and noted the estimated $1.5 million per year reduction in capital funding; staff also said the water, sewer and stormwater utilities are separate enterprise funds and one fund’s reduction does not offset another’s obligations. Councilors directed staff to return with modelling showing the consequences to the capital improvement plan and alternative scenarios that preserve needed revenue.
Ending: Council did not adopt the multifamily change at the study session; staff will provide additional modelling and return with more detail.
