Water & Sewer Rate Increase Will Contain Long-Term Costs

Release Date: 
01/24/2017

Water & Sewer Rates will increase over the next year to pay for two projects which will help the City better contain long-term operational costs.  The phased increases will take effect March 1, 2017 (5%), October 1, 2017 (5%), and March 1, 2018 (4.9%). 

“It’s never easy to raise utility rates, but the challenge that we were facing is that our long-term operational costs were beginning to grow in an un-sustainable path,” said Mark Morgan, Assistant City Manager.  “The two projects which will be funded with these increases will allow us to put new systems in place which greatly reduce our long-term operational costs, and although that means we have to put up a substantial investment on the front-end, these improvements will allow us to ‘stop the bleeding’ and better contain our long-term financial risk.”

The first project is to install new equipment and machinery at the Sewer Treatment Plant which will allow for a much more cost efficient way to dispose of solids that come out of the plant.  The City’s sewer lagoon is currently filling with solids at a rate which require it to be dredged every three years, at a cost of approximately $1.4 million.  The new equipment, estimated to cost approximately $1.5 million, will allow the City to instead dispose of its solids for approximately $85,000 per year.  When accounting for the cost of equipment, this project will pay for itself in less than four years.

The second project is to replace all water meters in the City with remote-read meters.  Changing to this system, rather than having Water Department personnel physically check every meter, will allow the City to re-allocate approximately 1.5 FTE.  By freeing up the manpower from meter reading, the City will be able to focus more energy on the important work of maintaining the overall water system without actually having to hire additional staff.  More than 30 miles of new water mains have been added to the City since 1996, but the Water Department has not added any additional staff.  Without the investment in the new meters, additional staffing would have been necessary.

Aside from the long-term cost containment created by these two projects, utility customers will have a much better ability to control their own water usage, and therefore, their water bills.  The current manual system of reading meters means that customers may not find out about a water leak for 30 days during the summer, or as many as 90 days in the winter.  This can lead to very high, and unexpected expenses for the customer.  A remote read system will allow customers to track their water usage on a near real-time basis, and receive alerts if a leak is detected.  Additionally, with better data available, customers will be able to more efficiently plan out their irrigation usage.

Despite the increases, Hermsiton’s rates will still compare very favorably to other cities in the Pacific Northwest.  Raftelis Financial publishes a report of the utility rates in the largest communities in Oregon and Washington every year, with an apples-to-apples usage comparison.  Based on the 2016 report, Hermiston’s rates, once the full increase goes in to effect, will still rank lower than 89% of all other Oregon and Washington cities in the report.  A link to the full report can be found HERE.

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