Port Townsend moves to update utility rates

City planning upgrades to sewer, water systems

PORT TOWNSEND — The City of Port Townsend is getting ready to raise its utility rates as it looks for ways to pay for the roughly $20 million in upgrades needed at the city’s wastewater treatment plant over the next five years.

The Port Townsend City Council approved the first reading of several ordinances Monday night that collectively will increase sewer and stormwater rates, expand the low-income discount program, update connection fees and update the utility tax.

The ordinances will be discussed further at a council workshop meeting on Monday, Feb. 12, and approved at the council’s regular business meeting on Tuesday, Feb. 20. If the ordinances are approved, rate changes will go into effect April 1.

“We have about $20 million of work just to keep the existing plant running,” said Steve King, Public Works director. “We don’t want to throw that work away, so it is making progress to the full rehabilitation of the whole plant.”

Council members approved the first reading of four ordinances Monday, the first of which reduces the city’s utility tax from 18 percent to 16 percent; that was done in concert with another ordinance that combined the capital surcharges currently billed to customers with the base rate for the tax, thereby increasing the overall base charge.

Future utility bills also will include an explanation of all taxes and fees included in the charge.

Another ordinance will raise the city’s sewer rates by about 13 percent annually and stormwater rates by 10 percent annually until 2028. Water rates will remain the same.

The city also is looking to update the fees it charges new development to connect to utilities, known as system development charges.

The proposed changes would keep the development charge for water the same while increasing the charge for sewer connections and establishing a charge for stormwater.

Connection charges are based on the size of the construction. The base rate would be $5,258, up from the current charge of $3,758.

The proposed stormwater connection fee is $1,470.

Lastly, council members directed city staff to look into expanding the city’s low-income discount program. The city currently provides a 50 percent discount to households making up to 150 percent of the federal poverty level.

The U.S. Department of Health and Human Services’ 2024 guidelines define the poverty level as a household of two with an income of $20,440. According to the meeting’s presentation, 50 percent of area median income for Jefferson County is $33,750 for a family of two.

The proposed expansion would offer a graduated discount program where very low-income households are offered a 75 percent discount; 50 percent for middle to low-income households and 25 percent for low income.

The city’s current program has about 200 households enrolled, King said. With an expanded program, staff estimate the city could see as many as 900 homes qualify for the program.

“It’s very much a rate shift,” King said. “If we give low-income households a discount, rates have to be increased to make up that difference.”

If a large number of people do sign up for an expanded program, ratepayers who don’t qualify for the program will pay an estimated $10 more on their bill.

The city has been planning to increase its utility rates since last year when it hired Redmond-based Financial Consulting Services Group to conduct a rate study analysis. FCS found the city needs up to $140 million in replacements and upgrades to its sewer and water systems in the next 20 years, including the upgrades needed for rehabilitating the sewer treatment plant.

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Reporter Peter Segall can be reached at peter.segall@peninsuladailynews.com.

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