Drop in use puts squeeze on Forest Grove utility

Water rates are set to rise again in Forest Grove, as the effects of the lousy economy and the loss of a key customer continue to squeeze the public utility.

The city council will consider a $2 per-month water rate hike for residential and commercial customers at its June 27 meeting.

Susan Cole, the city's assistant director of administrative services, said a city consultant reviewed the cost of providing water to residential, commercial, multifamily and industrial water users.

Financial Consulting Services Group, of Redmond, Wash., found that the residential and commercial customers should pay slightly more to cover the costs of supplying water, Cole said. Multifamily and industrial customers were covering their costs, FCS Group found, with the exception of larger customers, who have an additional meter, referred to as a compound meter, which can be used for peak water usage and fire service. There currently is no charge for those meters and the council is expected to consider adding a charge next week.

The rate hike was expected. Last year, after three years of no increases, water rates jumped 8 percent.

At the time, city officials said that while the cost of maintaining and improving the city-owned water system continues to rise, revenue to the utility has declined due to a 12 percent drop of water use since 2008. In addition, the city is no longer leasing excess water to the Tualatin Valley Water District, which used to account for 7 percent of its water revenue.

For the average residential user, the proposed changes mean that their water bill will increase by about $2 per month, Cole said. For the average sized commercial customer, water bills will increase will range from $2 to $5 per month, depending upon usage.

Cole explained that although the city's water bill displays only one line for water charges, it is actually made up of two parts: a fixed charge and a usage charge. For residential customers, the usage charge is divided into blocks, so that the more water is used, the higher the price is for the highest block of water.

Residential water is priced this way because water usage tends to spike up in the summer, imposing additional costs on the water utility. By charging a higher rate for higher usage, the city hopes to encourage conservation of water in the peak summer season and recovers the additional cost. Since non-residential customers tend to use approximately the same amount of water all year long, they pay a flat usage rate per 1,000 gallons of water used.

If adopted by the council next week, the new rates will go into effect July 1. However, due to the billing cycles, customers will not see the new rates reflected in their bills until mid-August.

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