City utility rates for Oak Harbor residents are projected to increase by a total of about $54 over the next five years.

But there was also some good news.

During a meeting Tuesday, Oak Harbor City Council adopted five-year rates for water, sewer, solid waste and storm drain. The overall cost for residents is projected to increase by about 25% from 2025 until 2030, reversing a recent trend of decreased rates.

In fact, Deputy City Administrator Goldman, who’s also the finance director, pointed out during the meeting that Oak Harbor’s rates are no longer the highest among comparable cities. To make the comparisons, he used the rates paid by a single-family home that uses 700 cubic feet of water a month and has a 35-gallon trash and a recycling bin.

Such a family currently pays $199 a month. In 2022, the rate was at a high of $223, but then the council elected to lower sewer rates after a rate study provided good news. The city’s rates won’t increase to that amount until 2028.

Goldman pointed out that that the consultant who did a rate study in 2022 found that Oak Harbor had the highest overall rates among nine similar communities, including Anacortes, Mount Vernon and Burlington.

Goldman recently redid the study and found that Oak Harbor’s rates now fall in the middle of the range. Moreover, Oak Harbor was the only city that decreased rates during that period.

City staff at the time, however, explained to council that rate would likely have to be increased in the future, which is what is happening.

Under the new five-year plan, the total rate for the single-family home is projected to increase from the current $199 to $253 by 2030. Next year, the overall rates will jump to about $209.

Goldman and council members emphasized that the increased rates were not only expected but unavoidable, given the factors affecting the costs. As Councilmember Jim Woessner explained, each enterprise fund is self-sustaining, which means they are funded by the rates people pay. Except for a small utility tax, the city doesn’t make money from the rates.

Goldman said the fund balances for the different utilities are projected to go into the red at the end of next year without rate hikes.

One of the factors affecting rates, Goldman said, is an increase in wholesale water costs. Oak Harbor contracts with the city of Anacortes for water, which is piped all the way from a treatment plant on the Skagit River in Mount Vernon. The amount that Anacortes charges the city recently increased by 25%, Goldman said.

Likewise, the city contracts with Island County to handle solid waste and those costs are going up. The tipping fees charged by the county recently increased by 21%, in addition to inflation.

Goldman pointed out that the cost of handling solid waste has increased statewide in recent years. From 2022 to 2025, ratepayers in Burlington, Bainbridge Island and Bonney Lake saw increases of more than 50%, while Oak Harbor’s solid waste rate only increased 8%.

In addition, different utilities, Goldman explained, have to keep a fund balance to pay for replacement of infrastructure, plus there’s just overall inflation.

Councilmember Eric Marshall commended the city administration for adding a capital replacement fund to the utilities, which he said was “long overdue.” Just two years ago, the city’s public works director told the council that city infrastructure was in a “severe state of decay.”

At the same time, Marshall said he was concerned that the rates may have to be revisited in a couple of years, which he worried would bring uncertainty to city households. Goldman, however, said that the five-year plan for rates are based on the best information the city currently has.

“There’s always the possibility that we have to bring it back, one way or another,” Goldman said.

The council unanimously adopted the five-year rate ordinance.