Water service rates and fees.

And we have Joe Gall, who is the chief utility relations officer and Kathleen Leader.

And I guess I'll I think I'm just gonna pass it over to you all to get started.

And if you want, you can use this one.

Do you want this one better?

She's gonna present primarily.

So all right, Mayor and Council.

Uh thank you.

Uh my name is Joe Gall.

I'm the chief utility relations officer for Clean Water Services.

I've been here at Forest Grove a number of times.

Uh you're used to seeing me.

You're not used to seeing Kathy, our chief financial officer.

So Kathy and I have been making the rounds to our different cities over the last month or two to talk about to update council and answer questions about our cost of service study, which we have wrapped up, which Kathy will get into, and our rates and our rate proposal for next year, and then just generally open it up for questions that you might have as elected officials as one of our member cities.

So with that, Kathy, if you want to get started.

Thanks, Joe.

So good evening, Mayor and Council, Kathy Leader, Chief Finance Officer of the Clean Water Services.

And just for an awareness, so Clean Water Services, we provide the regional sanitary sewer and surface water management services for your customers there in Forest Growth.

And today we're gonna talk a little bit about the update to our cost of service study for our utilities, our financial forecasts, and our rate projections.

Next slide.

So first we're gonna give us some of the historical rate increases of some of the history of the rate increases within the district.

We're gonna give you an update on the cost of service study itself and our and our process.

We're gonna define regional and local services because they're key to really some of the costing of services in in the area, and we're gonna talk about our 10-year rate forecasts.

So Cleanwater Services has a history of modest and predictable rate increases.

Um within the last 10 years, our annual rate increase averaged less than um 4% at 3.38% over that time period.

As you can see in um the so that mapping is of the rate we bill our um direct customers, so we do regional and local services for some customers.

That is our regional and local rate.

So it in 2026, that's $66.95 per month for an average um customer sanitary and storm service.

As part of the um the update to the cost of service study, we did take to our board just on April 14th the actual methodology that we put in place, and part of the change to this methodology is there are different rate increases depending on the utility itself or in the service that's being provided.

Um, so there are different rates that could be proposed.

And then they also adopted our reserve policy, which is a key piece of our financial forecast.

They all come together with what rates would look like based on planning.

Next slide.

So the updating of the cost of service study was really it was the request of our board and and the member cities, um, including Forest Grove.

And the last time we did a uh cost of service study was back in 2008.

And there was a feeling that our service levels between the two utilities had changed and also within the regional and local program.

So we went back and initiated this study back in 2021.

Um, and just recently in February of 2026, we uh worked with Ortell Wells and Associates, a consultant to help finalize that study, get the um the forecast out and rate development put together.

Um results of that study were that it was true that the local rates charge did not fully cover the local program for both utilities, sanitary and stormwater.

And for clarity, just not your local because you set your own when we say the local rates, it's for you'll see a map soon.

It's for the urban unincorporated areas and the small city plain gas.

We provide local regional.

So I wanted to be clear about which local rates are um and so the study itself provides the basis of our long-term financial planning and rate development for the district.

Next slide.

So there are three main objectives of this cost of service study.

First, it was to review and update how costs are allocated between the two utilities, and then also how there's allocated between the regional and local services provided by Clean Water Services.

And the goal of that plan is to fund operating and maintenance, debt service, and capital costs annually, correct that local service area funding deficit for our local customers, clean water services, and then use that as a basis to calculate updated rates and about impact customer bill.

So this is where what Joe was talking about.

So we are charged different rates based on the air service area that customers are in.

So the whole green area that's Washington County in total.

The blue areas, those are the cities that we provide the regional service only to, and they provide their own local service for sanitary and storm.

So that's Forest Grove, Hillsborough, Beaverton, Tiger, Sherwood, and to Walleton.

And Corning.

And then you see that TAN area.

That's the area that Clean Water Services bills directly for regional and local.

And it that's the unincorporated urban unincorporated Washington County, and it's the cities of Gaston, Banks, North Plains, King City, and Durham.

Next slide.

So what are we talking about?

We're talking about regional versus local.

So the regional services relate to construction, operating, and maintaining our treatment plants, our pump stations, our pressure lines, and our conveyance lines 24 inches and larger.