Study says typical user would pay additional $7 a month sooner, $11 a month later

By Morgan Rothborne, Ashland.news 

The cost of a new water treatment plant project combined with the length of time since its last water rate increase force the city’s hand, Public Works Director Scott Fleury told the Ashland City Council during its Tuesday business meeting: rates must be increased. 

Along with many other cities across the west, drought conditions are reinforcing moving more of the cost burden of rising water rates to those using more water, said Josiah Close, a financial analyst at HDR Engineering, presenting rate study results along with Fleury. 

Under contract with the city to produce its first cost-of-service study for water rates since 2016, Close said the purpose of the study was meeting goals such as prudent financial planning and funding capital improvement needs. 

“Overall, we want to make sure we have revenues to operate the utility, maintain the utility through capital investment, replacing aging infrastructure … We also want to look at the proportionality within customer classes, how they utilize water,” he said. 

After analyzing the likely usage of customers, including peak season, debt service coverage minimums, inflation and other factors, the study can determine the appropriate charge — for Ashland, 13.5% increases for the next biennium. 

For example, the study says, a customer with a ¾-inch meter using 700 cubic feet would see an increase of about $7 a month next year and $8 in the following year, moving up to around $11 per month five years out, Close said. Fleury explained 700 cubic feet is roughly in alignment with daily domestic use. 

The study included a review of the feasibility of an “elevation charge” for those living higher up in the hills as directed by council and found it to be not a sufficient way to recover cost. The study also includes additional council direction to expand the customer assistance program by removing the senior citizen eligibility requirement and opening the program to a wider range of low-income customers, expanding the cost of the program from $18,726 to $33,120 over the next budget. 

“This initial evaluation will be iterative over time,” Fleury said. 

The legislature may pass funding to greater support such programs and the true expansion of it will show itself over time. The data used in the study reflected if everyone who qualified for the program was using it, Close said. 

The city is expected to face a high number of capital improvement costs in the near future, he said. The city will utilize grants and reserves in the water utility to offset those costs as it can. 

Water purchased by customers doubled but still did not compete with the cost for operations and maintenance overall and anticipated debt from a federal loan related to the water treatment plant project. 

“We’re trying to be conservative with some of our estimates so that we land the plane softly, so to speak,” Close said. 

Upon being questioned by Councilor Dylan Bloom about the loan program for the treatment plant project, Fleury said he’s working with the finance director developing a strategy of waiting as long as possible — likely 2027 —  to draw down on the funds and thereby potentially obtain the best possible interest rate for the city’s debt. 

Mayor Tonya Graham asked about the potential for recent changes in federal funding availability and the city’s potential to receive a Federal Emergency Management Agency grant to offset the cost of the water treatment plant project. Fleury said the changes were leading to initial slow-downs in allotment of funds but these funds were not expected to be lost and that the city had a good chance of obtaining funds with a shovel-ready project on hand and its documentation in order. 

In other council business Tuesday, Finance Director Marianne Berry presented on the second quarter finance update for fiscal year 2025. 

Council voted unanimously to approve an employment contract for Johan Pietilla as the new city attorney. Under the contract, Pietilla will earn a salary of $178,865 annually, a $350-a-month car allowance, up to 40 hours of administrative leave and “sufficient funds” for professional development opportunities such as conferences. Pietilla will move to the next step of the city’s compensation scale following a successful performance evaluation in July. 

Council also voted unanimously to update the city’s ordinance for noxious weeds to “provide additional time for compliance,” for those who may be behind on trimming vegetation around their homes before fire season, according to the agenda item. 

Graham thanked Doug McGeary for many years of service as Acting City Attorney. 

Council also heard from two guests on the night lawn, also known as the dusk-to-dawn sleeping area. Both brought the city’s attention to the importance of storage for homeless people. 

Angelo Short informed council the current storage space provided to guests isn’t enough to hold bulky tents, bedding and jackets and asked if council permission would be required for a larger “community lock box,” provided and managed by members of the community at no additional cost to the city. 

“I know it was meant to help relieve the clutter and unsightly movement of the items. … It would also help with the physical, mental, and emotional problems that come with lugging your stuff around town and give them more mobility to do things they need to do,” he said. 

Email Ashland.news reporter Morgan Rothborne at [email protected].