Wallowa eyes boost in sewer rates

Published 1:30 am Tuesday, January 23, 2024

WALLOWA — City sewer rates could double for Wallowa residents, as the City Council wrestles with ways to fund a $6.5 million project to upgrade the wastewater treatment plant, the council was told Tuesday, Jan. 16.

Lucas Stangel, of Anderson Perry, the engineering firm in charge of the project, explained some of the funding options available to the city. The largest would be a $2.5 million community development block grant (CDBG) through Business Oregon.

He said that will team up with a loan from the state Department of Environmental Quality from its revolving loan fund.

“The CDBG is what’s been driving the schedule for the project,” he said. “It’ll be a construction-only funding so we’re not using any of that yet because for construction, you have to have the design done to apply for it.”

Meanwhile, Anderson Perry is working on design for the wastewater plant and expects that to be completed in June. He said he hopes to see construction begin in the spring of 2025.

The state also has some requirements, Stangel said.

The state Department of Environmental Quality is requiring exhibits before it executes an agreement, he said. “They’re informational, payroll, financial audits, intergovernmental agreements, stuff like that,” he said.

And, he said, the council will need to pass two resolutions required by the DEQ. One simply authorizes the city to sign an agreement for the DEQ funding and one details how the city plans to pay back the loan.

Stangel told the council that the DEQ loan is a program with loan forgiveness of up to 50% for up to $2 million.

“Based on what I’ve seen, they’ve given that principal forgiveness,” he said. “They want this resolution to see that you can pay back the entire loan and not include the principal forgiveness, which, when you look at that, shows your rates going fairly high.”

That would likely mean increasing sewer rates for residents.

According to the city website each household pays $43 a month for sewer service since July 1.

“I’ve been running some preliminary numbers and it’s not quite double what you have, but it’s getting close,” Stangel estimated. “That’d be a hard pill to swallow.”

Councilor Paul Doherty agreed, but he added: “At some point, you have to bite the bullet.”

Mayor Gary Hulse noted that the current plant is 20 years old and has parts that are breaking down or just need replacing.

“We need to see that our sewer plant is updated, but we’re not opting to back out,” he said.

Councilor Scott McCrae wanted to make sure the city doesn’t get tied into anything it would regret.

“I’d recommend we have a parachute clause (in the resolution) to say, ‘OK, we’re stopping,’” he said.

He asked Stangel if DEQ is requiring the city’s resolution specify a rate residents will be charged.

“That’s what they’re requesting — they want a resolution showing how the city plans to pay back the loaned portion of the funding program,” Stangel said. “It doesn’t have to be rate increases, I guess, but what we’ve been talking about would be a rate increase.”

He said the rate increase doesn’t have to happen immediately or all at once.

“The rate increases don’t actually have to be in place until the end of construction — probably sometime in 2027, or maybe you do it in increments, say the first in January 2025 over a year and a half or something,” he said. “You’ll have to assess those higher rates at that time.”

He said he would contact DEQ to make sure exactly what the department wants.

Councilor Karen Josi, who works as business manager for the Wallowa County Educational Service District, said the loan forgiveness element of the DEQ loan makes that portion essentially a grant.

“The resolution without the loan forgiveness would make it an exorbitant increase,” she said.

In other business, the council:

• Voted to approve Stacy James to a vacancy on the council. James was one of four applicants and was approved on a 3-1 vote. She replaces Oran McCrae, who resigned in December for health reasons.

• Approved the transfer of a $5,000 grant the city received to the library. City Librarian Holly Goebel gave the details of how the grant will be spent: She said $1,500 will go to update juvenile fiction — books children in the second through fifth grade are independently reading for the first time; $2,500 will go to update youth nonfiction; $1,000 will go to the entire library.