FAQ Regarding Amity's Water & Sewer
Water section updated Nov 29, 2022. Sewer section updated Mar 9, 2022.
It is now March 2022, what's going on with the water projects now? Is it stalled again?
As of March 9, 2022, Mayor King and the City can announce a lot of progress has been made in the project. So, no, we're not stalled at all! Here are some highlights.
1. We've completed the changeout of our water meters. A little over 700 meters throughout the City were replaced with new digital, wi-fi based meters that are not only more accurate, but can also detect leaks!
2. We've modernized and updated our billing software. We automated many aspects of our billing system, allowing for bills to be sent electronically. We can also now show a 12-month history of use, on your bill allowing you to see and compare your high use months.
3. We implemented our new water rates which includes 2,000 gallons of water consumption (for a single residence) in the base rate. We also eliminated the "line replacement fee" from the bill.
4. Of note - Items #1 and #2 above were done without cost to the community, as it was paid for with federal COVID-19 relief money.
5. Oregon Dept. of Transportation has initiated the bidding and contracting process for the Salt Creek Bridge replacement project. The City partnered with ODOT to move and relocate our main water transmission line which hangs under the bridge. While we - the City of Amity - are no longer engaged directly in the work, we are still a partner in the project and are monitoring the work. ODOT's schedule has slipped some, but the expectation is that the work will be started this year and completed in 2023.
It is also important to note that through the efforts of Mayor King, the City secured and additional $600,000 in grant funding for our portion of the project through COVID-19 relief money provided by Yamhill County. This grant from the County will significantly reduce the City's long-term debt load and payback for the project.
Many of you are aware that the Salt Creek Bridge (OR Hwy 153 / 5th St) at the western edge of town will close the week of May 30, 2022. This closure affects all traffic, to include bicycle, pedestrian, and vehicle traffic.
Over the last few weeks, local service providers to include Ziply Fiber, Online Northwest, PGE, and Comcast, have been relocating their service lines away from the construction area. Some people in our community may have experienced service interruptions as the lines and poles were moved out of the way. Beginning the week of May 30, 2022, ODOT crews will block off access to the bridge and advertise the alternate route. ODOT's approved alternate route is for traffic to travel along either Highway 18 or 99W to the interchange in McMinnville (near the Lowe's) and then proceed along the other highway. This will avoid the bridge area and keep traffic off back roads. The City and ODOT are aware of other routes that can get you around the bridge construction, but do not endorse them as alternate routes.
Once the bridge is closed, work will begin on relocating the City's main water transmission line, dismantling and then demolishing the current bridge, and then building a new bridge. The City of Amity contracted with ODOT to complete the relocation component of this bridge project. ODOT will remove the line from the bridge, relocate it so it spans the river temporarily during construction of the bridge, and then reattach it to the bridge shortly before the bridge reopens. The city has received $1,800,000 in funding for this project; $600,000 in grant funding from the County and $1,200,000 in loan and grant funding from the State of Oregon and Federal partners. Currently, ODOT expects to invoice us for $954,801 to complete the work. Along with ~$200,000 in other associated costs the City has incurred and the overall project should total about $1,200,000.
The City's expectation is that water customers immediately west of the bridge may experience a water service interruption for a few hours in mid June or July 2022 and again in mid September 2022, while work crews relocate our water transmission line as a part of the construction project. The City will do its best to keep customers aware of the service interruptions before they occur.
*** Updated information as of November 29, 2022***
The bridge construction well underway. Our water transmission line was successfully removed from the bridge with only minimal interruptions to our city's water service. The City's involvement in the bridge construction, at this time, is merely "as needed." ODOT and their contractors are in control of the project. In later summer 2023, ODOT and the City will work together to reattach our water transmission line to the new bridge. ODOT still expects the new bridge will open on or about October 1, 2023.
6. Our major water infrastructure project is out for bid. What is our major project? First, the City is relocating our water intake location to a deeper, straighter, and wider portion of the river. This is important because the new location will ensure the City gets a smoother and more steady flow of water into the intake pumps, decreasing the amount of silt and debris that get sucked in and then must be processed out of the water. The overall water treatment system will be more efficient and effective in providing clean, drinkable water to the community, by not having to process out all the "garbage" currently sucked up by our intakes. Second, the City will update and improve the processing equipment and the building housing our treatment equipment. While our equipment is good and works well, it will not keep up with projected growth and increasing water demands over the next decade. The improvements will also ensure that our plant stays up with the latest EPA and DEQ environmental standards for water treatment. Also, our system is running on obsolete computer and electrical equipment and this project will update and improve our equipment. Third, we're installing about a mile or more of new water pipes to connect the intake and the treatment plant together. Finally, the City will install an information kiosk at its City Park acknowledging the historical significance of the land we're building upon and our partnership with the Consolidated Tribes of Grand Ronde and the Siletz Tribes.
On Monday March 7, 2022 we held a pre-bid meeting, wherein companies interested in doing the work met with City Staff and USDA/RD reps, to discuss all aspects of the work. From the participation and the companies present, the City expects we will get many competitive bids when we open them on March 31, 2022.
Once the bids are open and a "winner" is declared, the City will finalize funding, issue a "notice to proceed" with the winning contractor and within 60-90 days construction should begin. Therefore, we expect the project to be underway by July 2022 with an estimated completion to the project in late fall 2023.
As of May 23, 2022, the City selected a bidder and is in the process of securing final funding to initiate the project. It is our expectation, that after many delays and false starts, we'll begin the remaining construction project in August or September 2022. We expect the project to be completed in either late 2023 or early 2024.
The cost of this project for the City of Amity breaks down as follows:
Emergency Water Filters & Reservoir Renovations (COMPLETE) -
$2,129,242 in Community Development Block Grant funds
$22,000 in City matching funds.
New River Intake, Piping, Water Treatment Facility Renovation -
$3,293,611 in USDA grant funding
$6,473,000 in USDA loans, backed by city water revenue
The total cost of the project upon completion is: $11,917,853. This is significantly more than initially expected, due to inflation, engineering changes, supply chain issues, unforeseen delays with the environmental assessment, and delays caused by the pandemic response. However, Mayors Cape, Clark, Lehman, and King, along with the City Council, have done everything in their power to be good fiscal stewards of your money while bringing this project along. This work is necessary to ensure we can continue to reliably provide safe drinking water to you, now and into the future.
*** Updated information as of November 29, 2022***
This construction project is well underway! If one has been in the vicinity of OR Hwy 153 & Briedwell Rd, one will see the visible signs of the project underway. The work going on is the installation of the new clear wells, trenching and installation of new piping, and the valving and controls to operate this new infrastructure once complete. There is also work being done along the waterways. We expect the work to continue until early 2024, when the entire project is complete.
7. The City received its $2 million in funding via Rep. Anna Scharf and our State Legislature. With money in hand, we've asked our Engineers to begin scoping and designing the project that will install a new water main along Goucher St and renovate the transmission line that connects the City's Reservoir to the community. We expect to see final designs in the next few months, followed by a bidding and contracting process. While there are no current set timelines, we expect we can begin the work in late summer 2022 and finish the work in about 12 months.
As of May 23, 2022, our City Engineers are beginning the permitting, initial engineering, and easement acquisitions for this project. While no visible construction work is being done, lots of vital preparation and administrative work is underway for both projects. We will have both components of this project completed in 2024, as required by the State of Oregon.
Is my water safe to drink?
Yes. Amity’s water is tested on a regular schedule and meets all of the quality and safety requirements set by both the Oregon Department of Environmental Quality (DEQ) and the US Environmental Protection Agency (EPA). Feel free to stop by Amity City Hall to get a paper copy of our last annual report on Amity’s water. The water quality report is also on line and may be found on this website.
The City raised water rates back in February. Now we hear that during July's City Council meeting, water rates will be addressed again. Why?
In 2020, the City Council directed City Staff to undertake a comprehensive water rate study in response to both public concern about our water rates and to meet a requirement to pay back our funding sources. This rate study took nearly a year and was conducted by an outside, impartial entity.
This entity, Oregon Association of Water Utilities (OAWU), is the expert in analyzing and conducting research on water utilities.
OAWU will present the findings of their work on July 7, 2021 at the City Council Meeting. The expectation is that once OAWU presents their results, the City Council will vote to accept their findings. If accepted, then the City will implement the new water rates.
So, the City is going to raise water rates on July 7, 2021?
OAWU will present their recommendations. If the Council accepts the proposal, then they will have the option to accept a resolution to implement the proposed findings as a new water rate. They also have the option to decide when any new rates may go into effect. While City Staff will make proposals and recommendations, it is up to Council to decide.
The Council is under NO obligation to accept this rate proposal! Unlike our sewer rates, where time was of the essence and the legal need to balance the City's budget were driving factors, the City is under no such pressure now. The City requested this rate study as a means to determine if improvements to our water rate billing and rate structure could be made. If OWAU's proposal is not what the Mayor and Council want, they can ask OAWU to go back and "do it again."
Mayor Lehman HIGHLY encourages everyone to either come to the Council Meeting or ZOOM in, listen to the proposal from OAWU, and provide your input to Council. The City Council will make up their own mind, but they seek your input! They want you to hear the same thing they are - straight from OAWU's own experts.
The City of Amity did approve new water rates to go into effect beginning January 1, 2022. These new rates will include 2,000 gallons of water in the base rate. Therefore, if you use less than 2,000 gallons a month you will not pay anything more than the base rate.
But our rates are going up again, right?
Not necessarily. While OAWU has provided City Staff and Public Works a draft proposal of their final recommendation, it is only a draft. The City will receive their final proposal in July.
2019 - 2020 QUESTIONS:
Is my water safe to drink?
Yes. Amity’s water is tested on a regular schedule and meets all of the quality and safety requirements set by both the Oregon Department of Environmental Quality (DEQ) and the US Environmental Protection Agency (EPA). Feel free to stop by Amity City Hall to get a paper copy of our last annual report on Amity’s water. The water quality report is also on line and may be found on this website and a link to it was sent with your July 2020 water bill.
But my water was brown recently. Doesn’t that make it unsafe? Would you drink it?
The water is safe to drink. You are right it did not look nice at the beginning of July 2019. The sediment in the water was neither toxic nor dangerous. We do not like to drink water that is brown in color either. Yet, we test the water to ensure it meets EPA and DEQ standards for purity and safety. Feel free to stop by Amity City Hall to get a paper copy of our last annual report on Amity’s water; that states our water’s purity and safety.
Why was the water brown right before July 4, 2019?
It was brown due to a glitch when shutting a fire hydrant valve; a term called “hammering.” The City legally sold water to a construction firm, which took the water from a hydrant to fill a tanker truck. Upon completion of the process, the valve was shut too abruptly, causing the flow of water to backwash through the entire city system. As our water system adjusted, the water surged back and forth through the pipes.
It is similar to crimping a garden hose. When one crimps (or bends) a garden hose while it is running, the flow stops suddenly, but the water backs up at the crimp. Then when one releases the crimp the water surges as the backup clears out. This is similar to what occurred to Amity’s water system. This kicked up sediment in the pipes and turned the water brown. Flushing the system (residents running their faucets and the City’s Public Works releasing water) cleared up the water.
The City works with many entities that use the fire hydrants. Due to this unfortunate incident, the City will be more stringent about who is allowed to tap our fire hydrants. We commit to doing more to ensure non-city entities know how to properly open and close our hydrants. To this end, we are studying a future requirement that entities pay penalties for “hammering” our water system.
Sediment? From where? How did sediments get into the pipes?
All drinkable water running through any pipe system has millions of microscopic-sized mineral particles floating within. These microscopic particles sink over time and do build up over the years, settling at the bottom of the pipes. This is what was kicked up when the water system was “hammered.”
The City has a program in place to periodically flush the city’s pipes of sediments. When flushed, the water in the pipes is agitated in a controlled fashion, kicking up the sediment, and the water is sent into the City’s waste treatment system. This process helps keep the City’s water system clear of sediments. However, this is a water, time, and labor intensive process and is done only periodically.
Although the City works to clean its water infrastructure, such sediments may also come from the pipes on your property or inside your residence. Your pipes are of various qualities, depending upon the age of the house. Older homes, especially those built prior to World War II, may have untreated pipes that often rust or corrode. This rust may enter your water and discolor it. This may explain why some houses see more brown water than others.
Water heaters also need to be inspected and cleaned over their service life. Old water heaters can produce sediments, too, turning tap water brown. If you are experiencing discoloration when you use hot water, but not cold water, it may be due to the water heater.
The City recommends that you check your pipes and water heater, especially if you have an older home.
The November 2020 system wide flush the City did of its water infrastructure purged the vast majority of the sediment in our water pipes. This high pressure cleaning eliminated multiple years of buildup in our pipes ensuring that our water flows more consistently, with higher pressure, and with less sediment in the pipes.
But the City stated it has old pipes during the 10 July 2019 City Council Meeting. Isn’t this the culprit, the City’s old pipe system?
While the City of Amity - and many municipalities across the country - has a hodgepodge of pipes, these pipes were built to the safety codes and standards of their era. The City repairs and replaces pipes routinely, to ensure you have the highest quality, safe water from the source all the way to the connection point with your residence, regardless of the age of our infrastructure.
Does sediment enter into the pipes from outside? The City has had numerous leaking pipes; can impurities enter the pipes and contaminate our water that way?
This is unlikely. When there is a sizable leak, the escaping water pressure drives everything out of the pipe, not into it. Amity also chlorinates our water to kill bacteria that may be in the water. Chlorination and testing ensures the water stays safe to drink.
If you are interested in learning more about municipal water chlorination please check out this website.
Where is Amity’s water coming from?
Amity’s water comes from the South Yamhill River. It is piped to a treatment facility and then it is piped to the City. Our treatment facility ensures that the water from the river is made clean, safe, and drinkable before entering the City’s water system.
Do we use well water (underground reservoirs)?
No. Although some residents and agricultural operations draw from wells, the City pulls water from the river.
Why doesn’t Amity tap into the underground reservoirs that other cities use? Why not get water from the same source as McMinnville?
It would be prohibitively expensive to pipe water from McMinnville’s water source into Amity or use an underground reservoir. If our City Council approved using McMinnville’s water source, it would take years to construct the required infrastructure.
McMinnville has much better water. Why is our water worse than theirs?
Amity’s water meets the same DEQ/EPA standard as McMinnville’s for quality and purity.
McMinnville’s water costs a lot less than Amity’s water. Why do I pay so much?
A 2019 independent study of comparable water consumption rates concluded that Amity does not have the highest rates in Yamhill County. As of July 2019, Amity’s water rates are $17.89 cheaper per month than the highest rates in the county; overall, Amity is in the middle of the pack of Yamhill County municipalities. But, Amity is $39.67 more expensive per month than McMinnville, as of July 2019. It should be noted that Sheridan, in August 2019, approved a water and sewer rate increase.
There are many reasons for this. Our relative population to McMinnville is a reason. At last count Amity is right under 1,700 people. McMinnville is right under 34,000 people. Therefore, McMinnville can spread the cost of its water service over 20 times more customers. In other words, if the cost of running a municipal water system is $100 and Amity has 10 consumers, each will pay $10. If McMinnville has 200 consumers (20 times bigger), for the same $100 cost, each consumer will pay 50 cents. This is one reason why Amity pays more.
Another reason is the economies of scale gained by operating a large system. Yes, McMinnville does have a larger infrastructure and more employees, leading to higher costs. Yet, McMinnville also does things in large scale; the size of their system and the quantities in which they work provide economies of scale (like buying in bulk).
Next, each city gets to choose its own water rates independently of other cities. Municipal governments and utilities often use dozens of variables to determine optimal rates. What is factored into the rate calculation (the “how and why”) adds complexity to the process, making further comparisons between Amity and other cities, like McMinnville, difficult.
Finally, McMinnville owns all of the rights to its own water. From the source to the tap, McMinnville's water service does not have to pay for things such as state permits, water rights, and the like. This lowers a lot of costs. McMinnville's water is also all gravity fed, eliminating a lot of the infrastructure - pumps and other gear to keep the water flowing - that most systems employ. This significantly reduces costs for the rate payer.
Recently Mac Water and Light increased its rates. While, yes, it is significantly lower than ours, residents of McMinnville are also getting rate increases. So are other municipalities in Yamhill County, to include Sheridan.
Did my rates go up? How much did my rates go up? Why do they go up?
Yes, your base water rate goes up by $5 (five dollars) this month - February 1, 2021. You will see the increase in your next water bill. This is to ensure the City can repay the US Department of Agriculture / Rural Development's (USDA/RD) loan requirements for a $1.635 million loan the City accepted on July 31, 2019.
The City also raises rates when required, to meet the costs necessary to operate and maintain its water system and to ensure the overall long-term fiscal solvency of the enterprise. (Usually, the City has raised rates in alignment with Consumer Price Indexes.)
To serve you better in late 2020, Amity's City Council directed City Staff to undertake a rate study. USDA also agreed. We are currently researching multiple data to determine a new rate that will both meet the needs of our debt obligations and minimize the impact to your wallet. While the rollout of any rate proposal will need to be approved by Council, we do not have a projected timeline for completion of the rate survey.
Do we have the highest water and sewer rates in the County?
No. As of 2019, the last year we have documentation, the cities of Carlton, Newberg, Willamina, and Lafayette are all higher than Amity. Check out the chart here. Of note, since 2019, Willamina, Sheridan, McMinnville, and others, have all raised their utility rates. So, comparably speaking, the City of Amity is likely still lower than some communities within the County, even with the sewer rate increase.
Can our infrastructure handle "the planned 80 more homes to our town"?
First, there are not '80 more homes' planned for Amity! We're not sure where this number came from. But to answer a related question - can the city accommodate growth? Yes, the City of Amity can accommodate new housing up to a point. The City can accept/accommodate the approved new 6-unit housing development, or a new house going up on a vacant lot here and there, or a new business opening on Trade St. Currently, the City's water and sewer infrastructure can accommodate a new housing development of some scale, but not 80 units. Although '80 new homes' is neither proposed nor planned in Amity.
The City was in discussion with an entity about building an approximately 20-25 unit housing development in the south part of town. The City's current infrastructure can accommodate this. However, this project stalled and we are not aware of whether the developer(s) will ever attempt to follow through and build their proposal.
The City cannot accommodate or accept 80-unit housing developments at this time, without upgrades to our sewer system. However, we've not been approached to accommodate anything near 80 units of housing.
How can the City accept some growth but not others? In the answer above, it says the City can accept new houses going up on vacant lots. Can you explain?
Yes. The City currently has numerous vacant lots around town that can accommodate a house or a small business, as these lots are already connected to the City's sewer system. The City's sewer treatment capacity already includes these vacant lots. So, if someone wants to build a home on a vacant lot in town or build a business along Trade St, then that sewage capacity is already factored into our capacity analysis. However, if someone wants to build another apartment complex, or build a new housing development of multiple homes, then our City Engineers and Public Works must determine if that is within our capacity. If it cannot be accommodated, then we'll deny the development.
Can't the City just stop new development? Or stop it until the infrastructure is in place?
Sometimes. If the City cannot support the growth, then we will prohibit the growth. However, depending on the proposed project, we will often work with the developer to ensure the new growth is supportable by the City. It is foolish for any City to just outright prohibit all new growth, as over time that will reduce city revenues, limit city services, and potentially lead to an exodus of people and businesses.
We are attempting to improve the infrastructure now to accommodate future growth. This is the purpose of the water system improvements. However, this is costly and assumes a lot of risk. In Amity's case our water system needed significant repairs, so incorporating future growth into the project made sense. However, to just build new infrastructure or capacity could result in the City having expensive "bridges to nowhere" when the growth fails to appear.
Mayor King, the City Council, and the Planning Commission are acutely aware of this conundrum (growth vs capacity) and spend a lot of time discussing how we can be smart about our growth. Mayor King and our Council always welcome public commentary and input about Amity's future. If you have recommendations, solutions, or advice, they encourage you to share your thoughts at an upcoming City Council Meeting.
Why are we raising rates again? Didn't we just do that?
Within the 2021 FAQs below, we detail the reason for this rate increase. City Staff commends the (then) Mayor and City Council for making the tough choice to ensure the City remained fiscally solvent and to raise the rates in a manner that met the needs of the City.
Can the City impose higher rates on just the new growth in the City? For example, if a new housing development is built, then only those houses pay a new higher rate.
This is an interesting concept, but very difficult to implement and do so in a way that's equitable. There becomes a point where the older/established rate payers aren't paying enough into the system, unless their rates go up, too. Also, is there a break point between what's established and what's new growth? And if so, then what is it? The City would need to determine that in a pragmatic manner, which is not easy. The administrative burden of imposing such a system upon our sewer rates is likely counter-productive.
The closest example to such a proposal is rent-controlled housing, which has proven to be a complex and controversial policy decision for communities that implement or sustain such a policy. It is City Staff's professional opinion that while establishing such a policy is possible, it is not practical. However, the City does charge its water and sewer rates upon consumption. Therefore, those that consume more and place more burden on the water and sewer system pay more. This is how most municipalities operate.
Has the City done anything to "figure out how to LOWER our rates"?
Yes. The City is currently working with OAWU, the same entity that completed our water rate study, to reevaluate our sewer rates. This process will result in a new sewer rate structure for the community. However, we cannot guarantee it will actually propose lower rates. Additionally, we're currently working with our City Engineers to complete a Wastewater Facilities Plan (WWFP) that will highlight areas of our sewer infrastructure that may need overhauling, expansion, or other maintenance. If there are immediate fixes we can make to improve service and lower our operating costs, while staying within budget, we will do so. The WWFP will also assist us in determining what work to prioritize and what it may cost to improve our sewer system infrastructure for the future. Then, we can incorporate the cost estimates into future budgets and sewer rate changes.
We admit, the timeframe for this WWFP has slipped some. We expected it at the end of 2021. Now we expect it at the end of this year, 2022.
Can't we establish some type of process that "charge[s] the new homes extra and any new large development a HEFTY sewer and water 'betterment' fee"?
We already have such a process in place. It is called a System Development Charge (SDC). We apply this charge upon any new development in the City of Amity. These SDCs may run from a few thousand to tens of thousands of dollars, which the developer/builder of the project pays. The funds are used to increase and support infrastructure capacity to accommodate the new growth.
Did the City just raise our sewer rates? By how much?
Yes, on June 2, 2021 the Council voted to raise the City's sewer rates. Effective July 1, 2021 the base sewer rate for all users will increase $15. Then again on July 1, 2022 the rate will increase another (additional) $15. Finally, beginning in July 2023 there will be rate increases of 2% to keep pace with inflation.
WOW! That is a lot! Why?
The City is required by law to balance the budget each year and to balance each component of the budget, too. The City was facing a $150,000+ shortfall in the sewer component of the budget. City Staff, working with Council, cut as many costs as possible to our expenses in sewer operations. However, we were unable to close the shortfall without resorting to rate increases. City Staff advocated to Council to raise rates significantly to cover the shortfall.
Why wasn't City Staff capable of balancing the budget without a rate increase? Didn't they balance the budget it in years past? What happened?
Yes, the City did balance the budget previously. In years past, the City transferred money from different accounts in the overall budget to offset losses in the water account and sewer account. Unfortunately, due to the loss of revenue caused by COVID-19, this year the City did not have the funds available to transfer.
City Staff worked with financial advisors (our CFO) and the Council to strip the sewer budget of all extra costs. Yet, without next cutting services we could not find a way to close the gap between revenue in and expenses out.
The City is going to blame COVID-19...really?
Yes. The general fund is one of the ledger accounts the City pulled money from to cover losses in our sewer account. The City earns money into the general fund from gas taxes, lodging taxes, property taxes, and fees and charges applied to services. All of these decreased during the numerous closures during COVID. People drove less, did not go to hotels, and did not use services as frequently. The City, in-turn, received less money.
The City also uses System Development Charges (SDCs) and fees from builders and developers for sewer use. This revenue declined significantly as building slowed nationwide over the last 18 months.
Additionally, we received marijuana taxes from the state that went into our general fund. Measure 110 diverts much of that tax revenue to other state programs cutting the amount available to Oregon’s cities, including Amity.
In fact, we forecasted these losses last year and began to reduce expenses in anticipation of the revenue shortfalls. But it was not enough. Therefore, we had less available money to transfer between accounts. And it was largely due to COVID-19.
So, now that the economy is recovering, we will get that revenue back and the need to raise rates will go away, right?
Unfortunately, no. We are required to approve a balanced budget before the beginning of the fiscal year. So, the immediate rate increase must occur. However, if over the course of the next fiscal year our revenues do increase and our expenses remain stable, there may be a possibility of lowering the future rate increases.
Costs are going up nationwide. The City must pay more for goods and services, just like you. The financial experts in academia, government, and business expect costs to remain high for the foreseeable future. We must budget for these projected higher costs and ensure we can meet it with enough revenue.
Our City Council is committed to minimizing the frequency and dollar amount of the rate increases. They may reconsider the sewer rate increases during next year's budget preparations. They will reconsider rate increases when the sewer rate study results are presented.
Still, does this just mean that the City Staff was not doing its job properly and when it could not keep up the charade it just decided to raise rates?
No. The City Staff works under the guidance of the City Council. Previously, the City Council decided not to raise both water and sewer rates simultaneously. Therefore, City Staff had to legally balance the budget without sewer rate increases. City Staff attempted to not cut sewer services, personnel, or maintenance. Therefore, transferring money within the budget was the only other legal option at the time.
Moving money from certain accounts to others within the budget is legal. All these transactions were approved with Council oversight and the approval of our financial expert(s). This kept sewer rates artificially low while also balancing the budget for as long as it was feasible.
Did the City Administrator make this a predetermined certainty? The City’s Newsletter implied as much.
While the newsletter may have implied the decision was predetermined, it was not! The City Administrator admits that the Newsletter article he wrote was poorly worded and he apologizes. But the City Council and Mayor still had the option to vote against the rate increase.
Then why didn’t the Council vote down the rate increase? They know that we do not want another rate increase. It appears the Mayor and City Council want public participation, but only listens to the City Administrator and simply does what he wants.
Unfortunately, the City hasn't raised rates since early 2019, while our costs to operate and maintain the system kept going up. Circumstances of the last 18 months necessitated the City Council to vote upon rate increases now, before the start of this new fiscal year. The City Administrator and CFO are required to impartially present the data and make a recommendation to the Mayor and Council, which is what they did. In fact, our CFO requested sewer rate increases multiple times since 2019.
The Mayor and City Council held 3 public meetings with City Staff and our CFO over the last 6 months going through the City’s finances and budget. This was not a last-minute decision forced by City Staff. The Mayor and Council sought to avoid rate increases. They went through the budget line by line to obtain savings. They saved the community every penny they could. They argued and debated the necessity of a rate increase. They heard you and asked the tough questions of the City Administrator and CFO. They asked about mitigating the rate increases through other means.
The Mayor and Council did not come to their individual conclusions quickly and they did not make their decisions because the City Administrator and CFO recommended it. They were aware of the consequences of not voting for the rate increases and they each made up their minds accordingly.
What is the worst that would have happened if the Council listened to the community and voted down the rate increase?
The next vote the City needed to make on June 2nd, was a vote on adopting the budget. Had Council voted down the rate increase, then the budget proposal would had to be voted down, too. Thus, City Staff would have been obligated to go back through the budget, line by line, slashing expenses until the budget balanced with the revenues available (without a rate increase). City Staff would have had to do this in about 2 weeks' time, then present the changes back to Council during another Council Meeting, and then finalize our required documentation needed to meet the State's requirement to deliver a balanced budget on July 1st. City Staff would have had little time to explore and present various other options to the Mayor and Council and have them debate these options.
Ultimately, regardless of other actions taken, the City would've been forced to cut general sewer maintenance (fixing leaks) and reduce how much the sewer treatment system operates - how much sewage gets treated per day - to reduce maintenance and operation costs. The Council knew this would be even more unacceptable to the community than a rate increase.
Did the City consider any other options besides raising rates? What about issuing bonds or levies?
Yes, the City had the option to issue bonds or levies. However, there are many reasons these were rejected as options.
First, bonds require a lot of time and effort to establish. There are a lot of state and federal laws regarding how a municipality may issue bonds. There are also a lot of costs associated with creating bonds – lawyer fees, bankers, reports to file, etc. This also takes a lot of time, time the City did not have, as the budget needs to be balanced and approved by July 1st.
Second, per Oregon law, bonds may only be used for capital projects. Amity faces a revenue shortage; therefore, the bonds are not the appropriate tool to fix the problem.
Third, while City Staff briefly considered this option – putting a local tax option to the voters – they rejected the idea because it would both take too long to establish and may not gain the revenue needed.
Therefore, City Staff had two options to present to Council regarding balancing the upcoming budget – raise rates or drastically reduce expenses in sewer operations, maintenance, and personnel.
One can read more about Oregon levies and bonds at this website: https://www.oregon.gov/dor/programs/property/pages/property-taxes.aspx.
Did the City Council or the Staff consider other budget options, such as layoffs, stopping pay raises, eliminating other services, or contracting out services, to avoid the rate increase?
Yes, City Staff did consider other options. However, these options would either not cover the gap in needed revenue or would cause other problems for the City.
Closing City Hall or Public Works or reducing their operating hours would not make a significant impact on financial savings and would make it harder for the City to serve the community. Closing the Library would significantly hurt those community members who rely on its services - computers, internet connectivity, summer reading programs, etc., and would not significantly reduce city expenses.
While the City could've eliminated personnel or contracted out work, there are only 9 City employees in total. The City currently contracts out its City Planner, Law Enforcement (which also does Code Enforcement), Municipal Court Judge, City Attorney, and Chief Financial Officer. The County runs our elections and building inspections. Amity Fire is a component of McMinnville Fire and is not a part of the City government. Thus, we are already a very "lean" City, there is very little to eliminate or outsource.
Plus, many of our employees are unionized. Changes to their employment status (layoffs / pay freezes) would have required negotiations between the City and the union. While there are non-union, "at will" employees, these positions are vital to the City's operations - City Recorder / Treasurer and Public Works Superintendent.
The City Administrator's position may be eliminated, as that position serves at the consent of the Mayor and Council. While they have not indicated their desire to eliminate this position, they always retain that right. (If community members want to provide comments to the Mayor and Council regarding the City Administrator's performance or retention, they may do so. Public comments will help the Mayor and Council determine whether to extend the Administrator's contract past its Summer 2022 expiration.)
Therefore, the City Administrator determined not to pursue these options and did not advocate for them to Council.
Seems like the Council faced a difficult decision. Did anyone consider how much it will hurt those community, having to pay the higher rates?
Yes, it was a difficult decision and our elected officials agonized over it. They are aware that many individuals are still recovering from the economic recession of the last 12 – 18 months and that money is tight. The Mayor mentioned repeatedly that he, every Councilor, and the Administrator will be paying the higher rates, too. It was not an easy vote for them to cast, knowing they will feel the sting of the rate increase, too.
Through no fault of the prior or current Council, the City got caught in a "Perfect Storm" that required our elected officials to reconsider their position about rate increases. It is truly commendable that the City Council revised its position after considering new information; making the tough decisions needed to meet our fiduciary responsibilities!
But are you not just going to use this rate increase to pay for other things in the budget? You have multiple costly water projects underway (see above) won’t this money just pay for the on-going water projects? Basically, you are not really going to spend this money upon the sewer system.
No. While we can transfer money from the general fund and SDCs into our sewer account, we cannot use sewer revenue on non-sewer related projects or operations. Therefore, the sewer rate legally cannot pay for any water infrastructure projects. The money gained through the rate increase will be used to operate and maintain the sewer system.
We will not use this money to improve the sewer system at this time. We are in the process of determining what deferred maintenance and system improvements are needed. When that is accomplished and presented in an engineering plan - called a Wastewater Facilities Plan (WWFP) - then the City will begin repairing and improving the sewer system. The available funds generated by the rate increases will then be used to improve and repair the sewer system per the WWFP.
When will that happen?
Right now, we expect the WWFP to be complete by the end of 2021. Therefore, we will begin any sewer work in 2022 or 2023.
What is next?
The Council has directed City Staff to undertake a comprehensive sewer rate study and deliver those results to Council no later than June 2023. Like the water rate study, this will be conducted by an objective third party. They will recommend to the City Council a new slate of sewer rates that will meet the needs of the City into the future.
June of 2023 seems like a long time. Why not reevaluate the rates sooner or have the rate study completed sooner?
A thorough evaluation of our sewer rates by outside, independent experts will take 12 – 18 months to complete. The team of experts conduct an investigation into our sewer operations to find areas where the City may gain efficiencies, eliminate unknown redundancies, and cut costs. They will also review the WWFP to estimate the costs and (more importantly) the needed revenue for each recommended repair and renovation. Being independent, these experts will present their recommendations directly to the Mayor and Council without interference from City Staff. And they present their findings in a public forum, too. The experts are meticulous, and their recommendations are “worth the wait.”
Also, such a study may cost the City up to $50,000 to accomplish, but it could cost significantly less to conduct. Legally, the cost of the sewer rate study must be paid out of sewer revenues. The City cannot currently afford to pay for a study, but we’ve it budgeted in the future. The Mayor, Council, City Administrator, and Public Works see this as an investment in our sewer system’s long-term financial health.
The sewer rate approval was done under Mayor Lehman's term in office. Since he resigned, is his approval of the sewer rates now invalid?
No it is not. The rates were approved while he was the Mayor of Amity and the vote of Council was procedurally and legally valid.
Can a new Mayor undo this sewer rate increase?
Yes, the newly appointed Mayor could ask City Staff and the Council to reconsider the prior vote.
This would require a new vote of approval by the entire Council. While this could occur, it is unlikely, for an overriding singular reason -- eliminating the new rates would put the City right back where it was before Mayor Lehman's vote. Unless other drastic financial options were immediately undertaken the City would no longer have a balanced budget for this Fiscal Year and could be found in violation of State Law.