Port Townsend to ask consultant for advice on water rate models

Published 1:30 am Friday, March 27, 2026

PORT TOWNSEND — The Port Townsend City Council authorized City Manager John Mauro to execute a contract with a consulting firm which will support the city in updating its water rate model this year.

The city treats domestic and raw water rates as separate, with residential and commercial customers receiving treated water and with the city’s biggest customer, the Port Townsend Paper Corporation, receiving untreated or raw water, Public Works Director Steve King said at Monday’s council meeting.

The council approved a total of $100,000 to be spent on the water rate model update and other services from Financial Consulting Solutions Group (FCS).

FCS has helped the city with updating its models since at least 2013, King said.

“They have some very elaborate models that help us predict rates,” King said. “Those models have been serving us quite well for many, many years.”

Having a firm and, more specifically, a project manager, who knows the city, is very helpful, King added.

FCS helped the city with its recent sewer utility rates program, and the company was instrumental in helping develop the city’s income-based discount program.

“Normally the cost for such a project (as updating a water rate model) is $40,000,” King said.

Funds for the rate model update is already budgeted, he added.

King also requested $60,000 in additional funds from council to pay for consulting costs.

Among the help requested, FCS would support the city in the separation of the water-sewer fund into independent water and sewer funds. The process, which is already underway, is going well, King said.

“It’s really tedious,” he continued. “We need their help to make sure we balance shared costs (between the utilities).”

The city also will ask FCS to evaluate the sewer rate model, not to re-establish rates, but to reflect the separation of the funds.

“(That) lets us track that utility more closely,” King said. “It’s really hard to track when they’re combined, especially the reserves.”

The combined reserves are in a good place, King added, but with FCS’ help, staff will be able to track the distinct utilities’ reserves.

FCS also would help the city with state tax calculations, “to make sure our tax calculations are as efficient as possible,” King said.

FCS would help the city with the bond issuance process for the sewer fund.

The update for the raw water will come out of the Olympic Gravity Water System fund. The rest will come out of the city’s water utility or the sewer utility, King said.

The city will put its updated rates into effect at the beginning of the next year, King said.

“Which means we need to have the rates adopted in November of 2026 in order to get good notice out through our newsletter,” King said.

The updates are planned to be workshop topics in the late summer and early fall. King said he expects to plan a minimum of two workshops, maybe three.

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Reporter Elijah Sussman can be reached by email at elijah.sussman@peninsuladailynews.com.