Milwaukie sewer rates might rise

The city considers charging more as litigation with the county looms

By Matthew Graham

The Clackamas Review, Nov 23, 2009, Updated Nov 25, 2009

Even though Milwaukie has so far refused to pay a sewer rate increase imposed by the county in August, it is now considering charging residents more in order to build up a reserve fund in case rates do go up significantly.

Community Development Director Kenny Asher said he’s not sure how much the city is looking to charge, but staff is doing some analysis to figure out what the right amount would be.

“I think you’d call it contingency planning,” he said. “We need to ensure that the fund is able to maintain a cash operating reserve. And obviously we’re in a situation right now with a lot of volatility, exposure of that fund, unpredictable expenses, so we just need to do some basic fund analysis to determine what kind of reserve needs to be built up to insulate the fund from any sudden shock.”

Residents are currently charged about $11 a month per household for the treatment component of their sewer bill. The county asked the city to raise that to about $20. The city refused, offering instead around $13 or $14. At what seemed an impasse, the county canceled the city’s existing sewer contract and imposed a new rate of $25.31, raising the city’s monthly bill from around $100,000 to around $224,000.

In September the city received a bill of around $224,000; it sent the county $120,000, what City Manager Mike Swanson said was closer to its offer of $13 or $14 per customer. The county said it would start charging interest on the balance.

The city and county are still negotiating what the permanent rate should be; the county has said $25.31 is an interim figure. But the city’s rate is expected to go up, and if the county does impose interest on the balance for what’s currently being charged, the city could have a hefty bill at the end of the fiscal year in June.

The “surcharge” is the city’s attempt to build up a reserve fund should that be the case.

Asher said the city would like to start the surcharge in January.

“We’re doing some analysis and ultimately the council needs to hear that and decide how much and for how long and when to begin,” he said.

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