CANNON BEACH — Cannon Beach residents may pay more for their water next year.
City staff suggested water, wastewater and storm drain rate increases at the May budget committee meetings. They also suggested a study to bring the city’s rates “up to market rate.” Without the hike, money would need to be transferred from the city’s general fund, as it has in years past.
Staff has proposed a 7 percent increase in monthly water charges, which would go from $795,000 to $845,000 in next year’s budget.
The 7 percent increase is “just the beginning,” Public Works Director Dan Grassick said.
The amount is a conservative estimate, Grassick said, because the city will not get the entire 7 percent.
“When you raise your prices, people tend to conserve,” he said. Ratepayers may see an estimated $1.40 increase a month per average household.
City Manager Brant Kucera compared Cannon Beach’s water rates to those of Astoria, Warrenton and Seaside.
“We are from 60 percent to 30 percent where everyone else is,” Kucera said. “Our rates have not been adjusted enough in recent times.”
Homeowners could see a 5 percent increase in wastewater fees and 3 percent increase in storm drain rates.
The budget for monthly wastewater charges in the upcoming year is $1.1 million, compared to $1 million in the current year. Storm drain rates could go up from $138,000 this year to $142,000 proposed for next year. The city’s general fund has been subsidizing enterprise activities — among them water and sewer costs — for 10 to 15 years, according to budget committee members.
The rate increases would not solve the problem of the general fund subsidizing enterprise activities, Kucera said earlier this month.
“We are going to do a rate study to set them where they need to be, so our business activities start to become sustainable,” Kucera said. “We’ve got to get our rates up to market rate to support the functions we’re doing.”
Grassick said the city needs a “defensible” rate study, based on customer classification and capital project needs, because the state and ratepayers can challenge rates.