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Proposed utility rate increase on hold

A new fee that was tacked onto utility bills starting in February not only prevented 34 police, fire and park positions from being cut from Gresham’s budget, but it also may be to thank for possibly preventing a rate hike next year.

With residents already being hit with an extra $7.50 a month on their utility bills, Gresham Mayor Shane Bemis asked the city’s budget committee if a proposed rate hike to take effect next year could be avoided through other cuts.

The increase was part of a three-year plan to raise utility rates an average of 5 percent per year to pay for ongoing maintenance and operation costs.

City staff explained the proposal last week when Gresham City Manager Erik Kvarsten outlined his proposed $384.3 million city budget for the fiscal year 2013-14.

On Tuesday, April 23, the budget committee - made up of Gresham city councilors and city finance committee members — approved the budget. City councilors will consider it further in June when the council is scheduled to adopt it.

The proposed budget called for a utility rate increase averaging about 5 percent each year for the next three years. The first increase would have taken effect next January and totaled 4.1 percent between the water, storm water and wastewater rates, costing a typical residential customer an extra $2.94 a month.

But Bemis last week voiced reluctance to increase utility rates.

Residents just saw their utility bills increase $7.50 a month starting in February. City councilors created the temporary fee last year to raise $4.7 million in order to prevent more cuts to Gresham’s police, fire and parks departments.

Residents will vote next year on a levy that would replace the fee.

To avoid financially overwhelming residents with skyrocketing utility bills, Bemis last week requested a list of alternative cuts that could be made elsewhere instead.

Steve Rancher, the city’s environmental services director, responded with a memo stating that the proposed budget does not depend on a utility rate increase. To forgo a rate increase, the waterwater division could reduce operating expenses, the water division could postpone capital projects, including “major maintenance or replacement of infrastructure,” and the stormwater division could do both.

Gresham city councilors will decide in June, when they are scheduled to adopt the budget, whether to hold off on a rate increase.

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