Wastewater Plant Improvement Surcharge

At its June 11 meeting, the Lafayette City Council adopted the resolutions associated with the FY 2026-27 Budget. Residents will see the following changes reflected beginning with the July 20, 2026 billing cycle:

• The McMinnville Water & Light debt has been paid off three years ahead of schedule, eliminating the existing $15 monthly debt surcharge.

• Water rates will increase by 4%, and the sewer base rate will increase by $2 per month.

• A new $15 monthly Wastewater Improvement Surcharge will be implemented to help the City prepare for approximately $17 million in future wastewater system improvements needed to maintain regulatory compliance, system reliability, and long-term service to the community.

While the timing of these changes coincides, the retired McMinnville Water & Light debt surcharge and the new Wastewater Improvement Surcharge are unrelated. The new surcharge is intended to help the City begin preparing for future wastewater infrastructure investments that are anticipated over the coming years.

City Staff, the Budget Committee, and the City Council will continue evaluating project costs, funding strategies, and opportunities to utilize grants and other City resources to help reduce the financial burden on utility customers. The City Council has also begun drafting a ballot measure for the November General Election that, if approved by voters, would authorize the use of $1.4 million in State grant funds, along with approximately $250,000 already accumulated in Sewer System Development Charge funds, for the Canyon View Pump Station replacement project.

With the FY 2026-27 budget season about to conclude, the City of Lafayette has proposed paying off the McMinnville Water & Light debt three years early, which would eliminate the current $15 monthly surcharge associated with that obligation for residents. While this represents a major financial milestone for the City, it also comes at a time when Lafayette is facing approximately $17 million in necessary wastewater system upgrades over the coming years to address long-term regulatory compliance, system reliability, and future capacity needs. Based on current planning timelines, funding strategies, engineering design, regulatory approvals, bidding, and contracting requirements, the earliest construction on major wastewater improvements would likely begin around 2031. In the meantime, the City continues to pursue outside funding opportunities to help offset future infrastructure costs wherever possible, including recently receiving a $1.4 million State grant award for the Canyon View Pump Station replacement project, pending voter approval during the November General Election.

To proactively prepare for these long-term wastewater infrastructure needs, the City’s FY 2026-27 Draft Budget includes a proposed new $15 monthly wastewater surcharge. Revenue generated through the surcharge, combined with additional City funding contributions, is anticipated to provide approximately $500,000 toward future project costs and loan readiness. Establishing these funds now will strengthen the City’s ability to secure financing, reduce future financial impacts, and begin making payments toward critical system improvements when construction begins. To help ease the future financial burden on the community, the City has also slowly begun increasing sewer rates over the past several years to better position the utility for future treatment plant and system upgrades. This year’s proposed sewer rate adjustment would add approximately $2 to the monthly base rate. The City will also continue exploring additional opportunities to utilize General Fund dollars and external funding sources in a responsible manner to help reduce the burden on ratepayers while preserving the core services the community expects and deserves.

City Staff, the Budget Committee, and the City Council will continue to monitor the project and associated financial needs annually, and future adjustments to the surcharge may be necessary to adequately fund the project and maintain long-term system sustainability. The City Council will be discussing and voting on the proposed budget during the June 11 City Council meeting at 6:30 p.m. The City encourages community participation and welcomes public involvement throughout the budget process.