The cities of Albany and Corvallis are about the same in age, size, and geography, on the same river, and subject to the same state and federal regulations. So how come the combined city utility rates in Albany are substantially higher than in its neighbor 10 miles upstream?
One reason is that Albany borrowed vast amounts of money for big new water and sewage treatment facilities that it still has to pay off. But since 2011, Corvallis has held off making changes in its wastewater treatment system because final regulations on river temperature — the same rules that prompted Albany to build its Talking Water Gardens in anticipation — have not yet been promulgated.
Albany utility officials have briefed the council on recommended rate increases: 3.5 percent for sewers in July 2019; 5 percent for water in January 2020; and 17 percent for stormwater in March 2020. For the typical Albany household, the increases total $5.78 a month and will bring the average monthly bill for all three to about $120.
By contrast, Corvallis approved increases last November of 2 percent for water, 2.5 percent for wastewater, and 8 percent for stormwater, totaling an increase of $2.10 in the monthly bill of the typical household. The monthly total in Corvallis now is just under $85, according to table of rates shown to the Albany council.
Albany borrowed about $77 million to rebuild and expand its sewage treatment plant and build the Talking Water Gardens. Paying this off costs $4.7 million per year through 2032, with Albany responsible for about $4.3 million and Millersburg the rest. A few years before, the city issued revenue bonds for a second water treatment plant near Scravel Hill and work on the Albany-Santiam Canal intake. After refinancing in 2013, those bonds are being repaid at about $1.9 million a year until 2037.
Mary Steckel, the public works director of Corvallis, reminded me that comparing utility costs, even of outwardly similar cities, is hard because systems differ in many respects.
Corvallis, though, had an advantage that helped hold down utility rates. It owns the Rock Creek watershed property and until the mid-1980s, timber revenues from the land went to maintain the water system, keeping the pressure off ratepayers. (Albany, on the other hand, at about the same time bought a notoriously leaky water system from Pacific Power & Light.)
Steckel said that once the rules are set on the temperature of treated wastewater discharges to the Willamette River, Corvallis expects to face “a significant project with significant costs.”
In addition, Corvallis has just completed an asset management inventory of its water and sewage systems and is starting to see the need for future investments in those systems. More planning is in the works for seismic resiliency and other factors such as climate change.
“So,” Steckel concluded in an email to me, “while Corvallis rates are lower now, that picture could change quite dramatically in the near future.”
Until that happens, though, customers of Albany city water utilities will likely keep wondering how Corvallis manages to charge its residents 30 percent less. (hh)