Water rates may not need to be raised
The manager of the state’s revolving fund program said McMinnville does not have to raise water rates to build a three-million-gallon water storage tank.
In a meeting earlier this month, city officials said they were advised water rate increases were in order to be able to borrow money at a low-interest rate for two major projects estimated to total $4.2 million. Now it appears city officials can undertake one — but not both – of the projects without a rate increase.
City officials won’t have to raise rates if they only want to build the water storage tank. However, if they also want to proceed with plans for a wastewater treatment project, also called a lime stabilization system, a rate increase would be required.
State Revolving Fund Program manager Sam Gaddipati noted in a report this week that rates relative to the water storage tank project alone are fine. Gaddipati said a rate hike would not be necessary to obtain a Drinking Water State Revolving Fund loan of $2.1 million for the three-million-gallon water tank and a 20-inch transmission line.
“The city of McMinnville has applied for two loans. One is for wastewater treatment and one is for a water tank project,” Gaddipati said. “If they go just with the water tank, they don’t have to raise any rates, but if they want to go with the wastewater treatment project also at this point, they do have to raise the rates. If they go along with the water project only, they don’t have to raise any rates.”
City Administrator Herb Llewellyn said a Water and Sewer Committee meeting is being scheduled to discuss the matter further and said at last report from the city’s engineer, the water tower project could be initiated first and rates related to the wastewater project could be looked at again in several months.
City officials have said the tank is necessary to increase water pressure and storage capacity, while the report specifically noted the city is in violation of state storage capacity requirements.