(The Center Square) – Spokane could see utility rates climb by 3.5% in 2027 and again in 2028 as the city council prepares for the upcoming budget cycle after back-to-back deficits over the last two years.
Public Works Director Marlene Fiest told the council during a Tuesday committee meeting that the rate hikes would apply to water, wastewater, stormwater and related capital charges. She said it would help pay for $50 million in capital projects, ongoing asset replacement and roughly $13.5 million in bonds.
Fiest also wants to adjust sewer base rates to increase the minimum commercial charge for a business with a four-inch meter by about 425%. That would raise the base from roughly $40 to $210.
She said that out of nearly 5,000 commercial customers, more than half would see only the 3.5% rate increase.
“It is a sizable jump, but when we looked at the cost of service analysis, that is how much they were underpaying for their service,” Fiest said after Councilmember Michael Cathcart raised concerns.
Who pays what
If approved, the utility rates wouldn’t affect every residential or commercial customer the same way.
A single-family customer currently pays about $102 per month in fixed water, sewer, stormwater and water/wastewater capital charges, before water usage and garbage collection.
Raising rates by 3.5% would increase the monthly total by $3.56, or $42.70 annually, before usage and garbage collection.
Commercial rates are more complicated because they depend on water meter size and other factors.
“I hear it constantly, you know, just this perception of the city being anti-business, and if we’re raising rates pretty dramatically on some of those businesses, that could further that,” Cathcart said Tuesday.
He noted that when the council adjusted Spokane’s general facilities charges, it tried to phase them in over two years, arguing that the city should do the same with the proposed commercial sewer rates.
Fiest said they’ll consider the idea, noting that while commercial customers have been “underpaying,” multifamily homes have been “overpaying” compared to residential customers. She proposed reducing the commercial multifamily sewer rates, which vary by the number of units, by $4 in 2027 and 2028.
“Only about 140 [commercial customers] have a meter larger than four inches, so we’re really talking about a small subset here that we believe needs to be paying more to cover their cost,” Feist added.
From 2014 to 2024, Spokane raised utility rates by 2.9% annually. However, solid waste rates rose by 10% in 2024, and water, wastewater and solid waste rates increased by 4.8% overall in 2025.
Solid waste increased again this year by 7.5%, while water and wastewater rates each increased by 5.4%.
To encourage conservation, Fiest proposed creating a new commercial water-use rate structure so that businesses would pay $1 per 100 cubic feet in the winter and $1.51 per 100 cubic feet in the summer.
However, city parks and schools would only see a flat, year-round rate under the public works proposal.
Businesses outside of city limits that use the city’s water services would pay more than city customers.
Feist also proposed creating a new rate class for “micro units,” which she defined as 350 square feet or less. She argued that they use less sewer and fewer capital facilities than other multifamily customers, so they want to set the micro rate at 60% of the multifamily sewer and water/wastewater capital rate.
Utility tax rates
While Council President Betsy Wilkerson and Councilmembers Sarah Dixit and Zack Zappone chimed in briefly, only Cathcart questioned the impact of the utility rate increases. He also challenged Spokane’s utility tax rate, which had been 20% from 2006 until the council temporarily increased it to 21% for 2024.
Fiest said utility taxes are expected to generate about $60 million this year for the general fund, which means nearly $1 of every $4 in budgeted 2026 general fund revenue comes from the city’s utility tax.
“The expectation was that we were going to get back to 20%, not 21%,” he said, referring to the 2024 council vote to extend the 21% rate through 2028, before raising it again last year to 21.5% for 2026.
The tax hike came at the direction of former Mayor Nadine Woodward as she faced a budget deficit on the way out of office. Current Mayor Lisa Brown then asked the officials to extend the sunset date as Spokane faced another shortfall after she took office, before the dais raised the rate to 21.5% last year for 2026.
In passing that last increase, the council moved the sunset date so that the rate would fall to 21% in 2027.
Cathcart recently told The Center Square that the council is still waiting for a budget forecast from the administration to determine whether there will be a shortfall ahead, which he says is more than likely.
Fiest will return at the end of July for another presentation and provide the council with sample bills that break down what commercial and residential customers could be looking at under the proposal.
Her goal is for the council to adopt the utility rate ordinances this fall, in advance of budget adoption.
“What our cost-of-service analysis is always telling us is that commercial has been underpaying for a really long time,” Feist said Tuesday. “At some point we have to correct some of those differences.”