Pilot Rock City Council approved on a split vote Tuesday the city’s 2015-16 budget that included raising sewer and water rates $10 per month. But that raise and several more in the near future won’t affect city staff, councilors or the mayor who don’t pay the fee.

Councilors Bob Deno, Raymond Doherty and Deacon Perkins voted for the $2.1 million budget with a $654,000 general fund, while Kacie Moss and James Hinkle opposed it. Councilman Ray Corwin was absent. The minority members said their bone of contention was a fund the council created earlier in the meeting at the request of resident John Taylor to help the city pay for improvements to the sewer lagoon.

The city is looking at a $2.5 million-$3.7 million project to upgrade aging sewer lagoons. Paying for that will require grants and low-interest, long-term loans from state agencies, such as the Oregon Department of Environmental Quality’s clean water loan fund or Business Oregon’s Infrastructure Finance Authority. City recorder Teri Porter told the council that to qualify for the grants or loan, the rates needed to be in line with similar cities.

Pilot Rock, population about 1,500, charges a base rate of $21 a month for sewer and $18 a month for water, according to Porter, who at the meeting showed Irrigon, population about 1,800, charges $54 a month for sewer and $42 a month for water. And Enterprise, with a population of 1,940, charges $56.50 for sewer and $24 for water.

Porter said the city plans to raise rates $10 this year, then at least $5 in 2016 and at least $5 more in 2017 to move above $40 a month. The city could then qualify for loans from the state at a 1 percent interest rate, she said, and that low rate would amount to big savings over the course of the loan.

The rate hikes, though, drew opposition from Taylor and a handful of citizens who said they and others live on fixed income and could not afford the increase. Some also argued the council should not increase wages in the budget and should make city employees, the mayor and council members pay full price for sewer and water.

The city some time ago reduced those rates for employees in lieu of a pay raise, Porter said, and the 2 percent increase for employees this year is a cost of living adjustment. Living costs have increased 8.5 percent in the last five years, she said, but city employees in that time received increases totaling 6 percent.

Porter on Wednesday in an email stated city employees who live in the city limits and the mayor and councilors do not pay the base rate but do pay 32 cents per 100 cubic feet of water once they have gone over the base amount.

Councilman Doherty said the city should have been raising rates long before now, but failing infrastructure means the city cannot put this off any longer.

Most councilors, though, said they liked Taylor’s suggestion of a lagoon reserve fund for the sewer project. Perkins moved to create the fund using $39,562 from economic development money, which Porter said was doable. Hinkle and Moss did not back the plan. Moss indicated she wanted more time before deciding. But it passed 3-2.

Perkins also said it may be four years before the city even breaks ground on the project, so they have time to look at other ways to help cover the costs.

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Contact Phil Wright at pwright@eastoregonian.com or 541-966-0833.

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