Location: City of Gold Beach, Oregon

Issue: With multiple capital improvement projects planned for 2016—focusing on efficient use of water supply—Gold Beach leaders sought a third-party water rate evaluation.

Outcome: Following RCAC’s evaluation, the city adopted a water rate study and can now move forward with capital improvements.

The city of Gold Beach in Oregon operates a water utility and adjusts rates annually based on inflation. The city’s 2016 Water Master Plan focused on water supply and efficient use. City staff concluded that a third-party water rate evaluation was needed to determine if the city’s current rates were sufficient to cover improvements. City staff asked RCAC, which had conducted a wastewater rate study for the city in 2011, to complete a water rate analysis and offer recommendations. An analysis would determine whether projected revenue under existing rates would cover pending capital improvements to the city’s water system.

In June, RCAC completed the rate study, finding that the water system fund’s balance was insufficient to meet future operational and capital project needs. RCAC also developed three potential rate adjustments that would solve the shortfall. RCAC’s analysis considered the city’s reserves, finding that the amounts did not meet best practice standards. RCAC recommended that the city prioritize increasing rates to create adequate reserves.

RCAC conducted the analysis as a fee-for-service project—at significantly less costs than the engineering firms proposed—eliminating the need for additional loans or grants to complete the study.

Lastly, RCAC demonstrated that customer satisfaction is essential to a rate structure change. The analysis highlighted the importance of transparency, annual budget and rate reviews, and establishing a pattern of small rate adjustments.

The city adopted RCAC’s rate analysis in July, and its leaders now plan to pursue public funding to complete the pending projects. The rate study will help them prioritize projects and funding.

“Despite the fact that the study showed we didn’t have capital sustainability—which we kind of already knew—it was pleasantly surprising to see that it wasn’t as bad as it could have been,” says Jodi Fritts-Matthey, Gold Beach city administrator. “The rates had not been looked at in the 15 years I have worked for the city and honestly I don’t know that a rate study has ever been conducted. We didn’t actually have to raise rates much—it was more adjusting the rates to reflect the more you use the more you pay per gallon.  Just that change alone will make a big difference.

“RCAC (is) very professional and provides the kind of specialized expertise small communities like ours simply could not afford,” she continues. “Oftentimes when we get specialists to provide us with technical work, they talk over our heads or forget we have to live in the communities where these decisions are being made.  We run into these folks in the grocery store and have to be able to explain the decisions we make that are based on reports from outsiders.  That is where RCAC is a valuable partner—you guys GET rural.”