Finance director warns Medford Water Commission rate hikes could force Talent to adjust local water rates

Talent’s finance director reported Dec. 4 that the Medford Water Commission has notified partner cities of proposed wholesale water rate increases that will raise Talent’s wholesale cost from $1.01 to $1.12 per 1,000 gallons in the summer and from $0.81 to $0.92 per 1,000 gallons in the winter. "These rate increases are a result of several multimillion dollar capital projects that are being constructed by the Medford Water Commission," the finance director said.

Staff told council the increases are substantially higher than the 4% assumption used earlier in Talent’s own rate-setting and that the city will likely need to propose a "rate action course correction" early next year to avoid drawing down cash reserves. The finance director estimated that, without corrective action, Talent could see its water-fund cash balances suffer by at least $40,000 a year "for the next several years."

Councilors asked for more information about which Medford capital projects are driving the increase and whether partner cities are seeing similar increases. The finance director said the increases were tied to a number of projects including a new reservoir, earthquake hardening at the Duff Water Treatment Plant and a new campus facility.

Next steps: Staff will update the city’s rate model, coordinate with HDR Engineering and report back with proposed local rate adjustments early in the next fiscal year.