Thursday, October 8, 2026
A package of proposed utility rate hikes would lead to a roughly 5.5 percent overall rise to the average bi-monthly utility bill in the City of Olympia next year.
Olympia Water Resources Director Gary Franks presented a proposed package of 2027 utility rate increases, estimating it would add about $19.51 to the average bi-monthly utility bill.
The proposed rate increases are 4.5 percent for drinking water, 6.5 percent for waste resources, 8.7 percent for storm and surface water, and 9.5 percent for wastewater.
Franks said the increases reflect higher costs for salaries and benefits, fleet operations and indirect expenses. He addressed the rate increases at an Olympia City Council at a meeting on Tuesday, Oct. 6.
Franks also pointed to increasing energy costs, particularly for drinking water and wastewater, which rely on power and pumping.
He said revenue growth has remained limited, as customer growth has stayed flat.
Another ongoing pressure is rising energy costs. Franks said Puget Sound Energy has proposed a 13.7 percent rate increase for 2027, with additional increases proposed for 2028 and 2029, amounting to a cumulative 25.4 percent increase over three years. He said the increases would particularly affect drinking water and wastewater.
The waste utility is projected to have about $20.2 million in expenditures, while revenues are expected to grow by about 1 percent. That would lead to a projected budget gap of just over $2 million.
To manage the gap, Olympia Waste Resources Director Ron Jones recommended several cost-saving measures, including freezing a full-time employment position for most of 2027, extending the life of some smaller vehicles and eliminating transfer to capital.
The department woul also tap $500,000 in fund balance reserves. Jones said the measures would help bring the utility budget into balance, while limiting the impact on rates.
The Drinking Water Utility is recommending a 4.5 percent rate hike to address projected expenditure increases that are not keeping pace with costs.
Olympia Drinking Water Utility Director Mike Vessey said expenditures are projected to rise by 3 percent, reaching $18.1 million, while revenue growth remains stagnant. He said the revenues would fall short of expenses by about $818,950.
To help close the gap, the utility proposed reducing its planned transport to capital facilities projects to $500,000 from $1.6 million.
The Storm and Surface Water Utility is proposing an 8.7 percent rate increase to address a projected budget gap of approximately $1.6 million.
Franks said expenditures are projected to increase by 15.7 percent, or roughly $1.4 million, bringing total expenditures to $10.6 million for next year. Revenues are projected at approximately $9 million, resulting in a budget gap of $1.6 million.
To help close the gap, the utility plans to use approximately $486,000 in fund balance and reduce its capital transfer by $256,000.
Franks said the budget also reflects the loss of grant funding for the street sweeper, which is expected to end in June 2027. The wastewater budget also includes additional cost pressures, including a 3 percent annual rate from LOTT.
The proposed General Facility Charges and LOTT Capacity Development Charges include rate increases for drinking water, wastewater, storm and surface water, and LOTT, resulting in an overall average increase of about 4.5 percent.
Franks said the city is taking a phased approach to align rates with previous utility master plan recommendations, while a new multi-year rate study would guide future adjustments.
For affordability, the proposed drinking water and wastewater rates remain below the 2 percent of median household income threshold used by the federal and state agencies.
Council member Robert Vanderpool discussed the possibility of creating additional utility rate tiers based on household income in the future.
The approach could allow higher-income customers to pay more, while providing lower rates for households with lower incomes.
“I’m deeply concerned about folks who can barely afford rent, or fixed-income seniors who are losing federal programs,” Vanderpool said. “The last thing I want is for them to get to the point where they are not able to keep the power on in their homes during the winter or run the water when they need to.”
Franks said staff would ask the city's consultant whether other communities use income-based utility rate structures.
He also mentioned two assistance programs. The Lifeline Program provides a 50 percent bill reduction for qualifying low-income seniors and disabled residents, while and the Helping Neighbors Program provides assistance to customers with past due bills.
A public hearing on the proposed utility package is scheduled for Oct. 27.
7 comments on this item Please log in to comment by clicking here
TheVirtualOne
It’s long overdue for some serious change at the utilities. Layoffs, hold back raises, streamline work processes and cut costs. Turn the organization upside down and squeeze out more savings. We, the ratepayers, are not your ATM
machine anymore.
Yesterday at 8:59 PM Report this
CobraCommander
TheVirtualOne, oh, but you are!
You're paying more for gas due to Trump's illegal war in Iran, you're paying more taxes to fund Israel's genocide of Gaza, and you're paying more at the grocery store for Trump's failed tariff escapades. If trillions of dollars hadn't been siphoned off our economy to fund all of this and more, there would be more federal money for states to improve infrastructure.
Why does your answer only hurt the livelihoods of working people? Stop punching down and start punching up.
Yesterday at 9:29 PM Report this
JW
The Jungle handouts must continue
Yesterday at 9:46 PM Report this
Honestyandrealityguy
Sad. So inflationary. Penalize everyone because of a "popular" topic with employees. Sad we all can't do that.
Today Report this
hptrillium
Puget Sound Energy should not get such large increases. City of Olympia utilities should do cost cutting as mentioned above and reduce the amounts of increase. Charging based on income is also a good idea. We can’t afford all these rate hikes.
Today Report this
chrispc2u
This increase should be tied to real inflation, not Trump’s destruction of our economy because of his own personal crime family and cronies greed. MAGA phony patriots with “SUCKER” stamped on their cult red hat wearing foreheads have no room to complain. These skyrocketing costs are a direct result of your willful ignorance and voting for a dysfunctional unethical cult of personality con anrt instead of someone who actually cares about his or her own voters.
10 hours ago Report this
Yeti1981
What concerns me most about this proposal is how all of these costs are compounding, and how little attention seems to be given to the policies contributing to them. Olympia is proposing utility increases while acknowledging that rising electricity costs are part of the problem. Those increases are being driven, at least in part, by state energy policies, infrastructure investments, and regulatory requirements. These costs do not exist in isolation. They eventually find their way into nearly everything we purchase, including housing.
I also find it interesting how quickly some of the comments turn this into another argument about Trump. Certainly, federal policies can influence inflation, energy prices, and the broader economy, but blaming these particular increases entirely on Trump ignores the decisions being made right here in Washington. CETA, the Climate Commitment Act, and other state energy policies have financial consequences. Legislators were warned about many of these costs when the policies were being debated. We cannot ignore those decisions simply because it is politically convenient to blame someone in Washington, D.C. Accountability should apply regardless of political affiliation.
There is another issue here that deserves attention. City staff acknowledge that customer growth has remained relatively flat, limiting opportunities to spread fixed infrastructure and operating costs across a growing customer base. Yet Olympia continues to struggle with housing production, and its own regulatory requirements, permitting costs, and development restrictions contribute to that challenge. When we make housing increasingly difficult and expensive to build, we also limit the growth in customers who would help support these public systems.
Now we are discussing raising utility rates, increasing development-related utility charges, and potentially charging higher-income households more to address affordability concerns. At some point, we need to acknowledge that affordability cannot be achieved simply by continually redistributing rising costs.
I recognize that utilities require maintenance, infrastructure investment, and reliable funding. But the public deserves a serious examination of what is driving these increases, what efficiencies have been pursued, and how local, state, and federal policy decisions contribute to the problem.
We cannot continue adopting policies that increase the cost of living, restrict opportunities for economic and housing growth, and then act surprised when residents struggle to afford the consequences. Nor can we continue treating every financial problem as an opportunity for partisan finger-pointing. At some point, government at every level needs to focus as much on controlling the cost of delivering services as it does on finding new ways to collect revenue. That is a conversation worth having, regardless of who occupies the White House.
7 hours ago Report this