The Baker City Council didn’t object Tuesday to a proposal to boost water and sewer rates by 12.8 percent starting July 1.

Councilors discussed the city’s entire fee schedule, which includes costs for all city services.

Councilors are slated to approve the schedule — including water and sewer rates — at their May 23 meeting.

The City Council broached the idea for a double-digit increase in water and sewer rates last spring. Only three of the seven current councilors were in office at that time.

In May 2016 councilors considered a 25-percent hike in water fees but decided on a 10-percent increase that took effect July 1, 2016.

Councilors also endorsed the idea of raising rates by 10 percent in both 2017 and 2018.

(The proposed 12.8-percent hike includes a 2.8-percent increase based on the federal inflation rate.)

According to an analysis by Murray, Smith and Associates, the firm that wrote the city’s water facilities master plan, a 25-percent increase in water rates was needed to pay for improvements to the water system. Councilors decided last year to raise rates incrementally over three years.

“Our infrastructure is a hundred years old,” Finance Director Jeanie Dexter told councilors Tuesday. “There’s a need to start replacing that infrastructure.”

City officials expect to spend $4.2 million over the next three years to upgrade the water system.

Based on average water use, the rate hike would boost residential customers’ monthly cost by the following estimates:

• $4.61 for customers who use about 36 units per year (one unit of water equals about 750 gallons)

• $5.11 for customers who use about 96 units per year

• $6.61 for customers who use about 276 units per year

The rate increase the City Council approved last year boosted the monthly cost for residents by an average of about $4 to $5.30, depending on how much water they use.

Dexter said the water rate hike proposed for this year would increase the city’s revenue by an estimated $299,000 over the fiscal year, based on recent water usage levels.

She said an electronic billing option will be available in July, and the new fee schedule includes a $1 monthly discount for water customers who choose the option.

The fine for customers who are 10 days late in paying their bills will be reduced from $35 to $5.

In contrast to last year, when several residents told councilors they opposed the proposed water rate increase, only one person spoke against the proposal Tuesday at City Hall.

“Your businesses downtown will get hit the hardest,” Donald Thatcher said. “Your laundromats, your car washes, your restaurants. It’ll just make more empty spaces on Main Street.”

Thatcher asked the council members to think hard about whether they really need to raise water rates.

Councilor Loran Joseph asked how Baker City’s water rates compare to those of other cities.

Public Works Director Michelle Owen said before last year’s rate hike, Baker City’s rates ranked 65th in a list of 120 Oregon cities.

“Quite frankly, we’re in the middle of the pack even with this proposed increase,” she said.

Owen said Baker City was in the lower third of that list if comparing combined water and sewer rates and near the bottom if just comparing sewer rates.

Sewer rates are also slated to increase by 12.8 percent on July 1.

The city didn’t increase sewer rates last year. Dexter said city officials proposed the rate hike this year to raise money for a major sewage disposal project the city is expecting to do within the next several years.

The city might need to borrow up to $5 million to convert from piping treated wastewater into the Powder River, to applying that wastewater on irrigated land.

The sewer rate hike will generate an estimated $150,000 more in revenue yearly. That wouldn’t cover the city’s annual loan payments, which would be about $370,000 over 20 years based on a $5 million loan.

The proposed increase of 12.8 percent in sewer fees would boost residential customers’ monthly bills by $2.41.

Business customers, who pay sewer fees based on the amount of water they use, would see monthly increases ranging from $2.41 to $57.50, according to the city’s estimates.

Mayor Mike Downing said he doesn’t like the idea of raising water rates, but he believes the council had no choice considering the aging water system.

“I don’t see a way around it,” he said.

Councilor Rosemary Abell and Downing both agreed that the incremental raises to the water rates was a reasonable way to approach the issue.

Councilor Jim Thomas agreed.

See more in the April 12, 2017, issue of the Baker City Herald.