The Hermiston City Council is planning to restructure water and sewer rates in October.
The city’s infrastructure committee has been working with engineers from Anderson Perry to create a capital improvement plan and look at how to raise revenue for needed maintenance on water and sewer infrastructure. The consensus is that more money is needed to continue operations; the question is the best way to structure rates to get there.
“We want to make sure each utility can cover their current and forecast expenditures, and we want to make sure it’s fair,” said Dave Wildman of Anderson Perry, during an hour-long discussion of water and sewer rates Monday.
All rate structures Anderson Perry staff came up with assume an annual rate increase of three percent per year to keep up with inflation after the initial restructure.
On the water side, the first option would be an increase of the base rate from $19.82 per month to $20. Currently users are charged $1.25 per 1,000 gallons after 13,000 gallons but the first option would charge $2.50 per 1,000 gallons past 15,000 gallons. The result would be that a “regular user” of 20,000 gallons would see their bill go down slighting from $44.48 to $40, while a large user (65,000 gallons) would see their bill increase from $100.73 to $152.50.
The second option is similar but increases the base rate to $24.50, keeping a “regular” user at about the same as their current bill.
The third option raises base rates to $30 and everything over 15,000 gallons to $3.50, bumping a 20,000-per-month user to $55 a month.
Wildman said the city has been mixing water and sewer finances together, and since it began paying off the debt service for the new wastewater treatment plant built in 2014 the water side has been subsidizing the sewer side.
For sewer the city currently charges a flat rate of $27.25 for all residential users, and for commercial users charges a base rate of $29.66 plus $1.50 per 1,000 over 5,000 gallons. Options presented to the council include keeping residential rates the same but raising commercial, or upping the base rate to $30 for all users, with a $1 per 1,000 gallon charge for residential and $2 per 1,000 for commercial. Another option would feature a $36 base rate with $2.75 per 1,000 fee for all users, or $30 base rate with $4.10 per 1,000 rate for all users.
Rates for residential users of 5,000 gallons would remain $27.25 under the first option, be $35 under the second option, $49.75 under the third option and $50.50 under the fourth.
For both water and sewer, councilors said they liked the idea of a structure that focuses on raising charges on heavy usage instead of the base rate. Councilor John Kirwan said it didn’t seem fair, for example, that currently a person living alone and generating very little wastewater is subsidizing a family with multiple teenagers.
Mayor David Drotzmann said raising the base rate tends to affect smaller users such as seniors on a fixed income, and focusing more on usage fees gives people the power to lower their own bills through conservation.
“It gives people more control,” he said.
Assistant city manager Mark Morgan noted that when doing rate comparisons with similarly-sized cities or the largest cities in Oregon, Hermiston is consistently in the “bottom five to 10 percent” on rates, and any of the rate restructures the city is considering would still keep it on the lower side of the spectrum. He said the city council should see a formal recommendation to vote on during the council’s Oct. 8 meeting.
During Monday’s regular meeting, the council voted to use a bid-design-build process for new construction at the Eastern Oregon Trade and Event Center.
City Manager Byron Smith said in his experience with construction projects, if a project is designed and then put out to bid, often the contractor that comes in will disagree with elements of the design, causing delays and budget increases as the architect/engineer and contractor go back and forth. He said he believes the method of putting out a request for proposals that includes design and construction has the potential to save the city money and time.
When Umatilla County and the city parted ways on EOTEC, the city agreed to pay half the cost of a new building containing office and storage space for the Umatilla County Fair, up to $250,000. Smith said the city plans to have that building complete in time for next year’s fair.
A top priority for the venue is also improving the RV park behind the event center, which currently has “very limited infrastructure” for 4-H and FFA students who stay there during fair week. Smith said fully developing the RV area will open it up to potential year-round use that could generate revenue for the city.
The city council voted to approve the bid-design-build process, and the city plans to put out a request for proposals as soon as possible.
On Monday the council also approved a contract for Gorge Aviation to become the new manager of the Hermiston Municipal Airport.
Morgan said Hermiston Aviation has always done an excellent job for the city but they are ready to get out of the business. Gorge Aviation was managing the airport for The Dalles (located across the river in Dallesport, Wash.) until a recent split in the company. Morgan said they were the only ones to respond to the city’s request for proposals but the airport committee was excited about what they are bringing to the table. He said they have a reputation for good customer service and increasing fuel sales for airports. They recently brought their airplane repair shop to Hermiston and Morgan said that has already resulted in a bump in fuel sales to customers who followed them to Hermiston.