Authorize the rates and charges for water and water-related services beginning July 1, 2024 to June 30, 2025 and fix an effective date
Official Record (Efiles)
An ordinance when passed by the Council shall be signed by the Auditor. It shall be carefully filed and preserved
in the custody of the Auditor (City Charter Chapter 2 Article 1 Section 2-122)
Passed as amended by Council
Auditor of the City of Portland
Simone Rede
Impact Statement
Purpose of Proposed Legislation and Background Information
The Ordinance sets rates and charges for retail and wholesale customers of the Portland Water Bureau for FY 2024-25.
Financial and Budgetary Impacts
· Retail rates are expected to generate approximately $234.6 million in water sales revenue in FY 2024-25. Retail customers are also expected to pay $2.5 million in customer late charges. FY 2024-25 wholesale revenues will be $26.2 million.
· Other rates and charges within this Ordinance are expected to generate $14.5 million for water-related services including system development charges, new service installations, customer requested new main connections, engineering permit fees, hydrant installation and usage, and miscellaneous utility charges.
· The proposed overall average effective retail rate increase is 7.9 percent in FY 2024-25. With a retail rate increase of 7.9 percent, the retail commodity rate will increase from $7.006 to $7.559, and the base charge will increase from $63.57 to $68.59 per bill (the billed base charge varies depending on the number of days in the billing period). The “typical” residential water customer using 5 hundred cubic feet (ccf) per month will now pay $60.66, up 7.9 percent from the FY 2023-24 “typical” bill of $56.22. The “medium” commercial customer using 100 ccf per month will see a water bill increase from $764.17 to $824.49; an increase of $60.32 or 7.9 percent.
· Two tiers of fixed low-income discount for qualified single-family residents that are billed quarterly are included in the Ordinance. The tier I discount is 50% for qualified low-income customers. The tier II discount is 80% for qualified extremely low-income customers. Also included in the rate ordinance is the Regulated Affordable Multifamily Assistance Program (RAMP), offering discounts for residents in multi-family dwellings. Further, the Smart Discount Program is also included in this ordinance, which utilizes machine learning and data to proactively identify eligible customers for financial assistance and automatically offer customer percentage-based discounts ranging from 5% to 80%, thereby eliminating the application process.
· All revenue and expenses are included in the FY 2024-25 Water Bureau Requested Budget.
Community Impacts and Community Involvement
This Ordinance will increase charges to all customers. The water utility rates are designed to generate revenue to cover the cost of providing water. The costs are determined by the budget which was reviewed by the Portland Utility Board (PUB), an eleven-member citizen body created to strengthen oversight functions for the City’s water, sewer and stormwater services. PUB provided input for the FY 2024-25 budget and rate proposal. Their recommendations were considered in creation of the FY 2024-25 Requested Budget. Additionally, all relevant documents were provided to the public on the Water Bureau website and information was shared through social media platforms.
100% Renewable Goal
This action does not affect the City’s total energy use. This action does not affect City’s renewable energy use.
Financial and Budget Analysis
Analysis provided by City Budget Office
This annual ordinance establishes rates, charges and fees to generate sufficient revenue for projected expenditures in FY 2024-25. Under these proposed rates, the typical single-family residential bill is expected to increase by $4.44 per month from $56.22 to $60.66 or 7.9%. Typical single-family is defined as a residential water customer using five hundred cubic feet per month. Increases to each individual customer and other customer classes may vary based on actual usage and circumstances. This rate ordinance will generate $234.6 million in operating revenue to support the bureau’s FY 2024-25 Requested budget for the Portland Water Bureau from retail water sales. Retail customers are also projected to pay $2.5 million in customer late charges. Projected revenue from wholesale revenue is $26.2 million. Furthermore, other rates and charges included in the ordinance are projected to generate $14.5 million for water-related services. The rate ordinance does not create costs or expenses to the City.
This legislation does not specifically create or eliminate positions in future years. Future position decisions will be made by the Council within the annual budget process. All revenue and expenses are included in the FY 2024-25 Water Bureau Requested Budget.