LOTT proposes $146.1 million budget with higher wastewater rates 

The LOTT Clean Water Alliance is proposing two consecutive annual wastewater rate increases, as part of a $146.1 million budget weighted toward capital projects. 

The proposed 2027-28 spending blueprint calls for a 3 percent increase in the monthly wastewater service charge in 2027, followed by another 3 percent increase in 2028. The LOTT Board of Directors authorized release of the proposal for public review at their meeting on Sept. 9. 

The board will hold a public hearing on Oct. 14, and then consider final rates. Adoption of the budget is planned for November. 

The monthly charge is proposed at $50.42 in 2027 and $51.93 in 2028. Preliminary rates received board approval in August.  

LOTT provides wastewater treatment for sewer customers in Lacey, Olympia and Tumwater. The utility treats an average of 12 million gallons of wastewater per day. 

Spending blueprint 

The biennial proposal includes $146.1 million in resources and expenses, which represents a 6 percent increase over the 2025-26 budget. 

Major financial components include: 

• $87.1 million for capital expenses, up 7.4 percent on an annualized basis

• $45.1 million for net operating expense, an 8.6 percent annualized increase

• About $14 million for debt service, down 7.2 percent on an annualized basis 

• $112.4 million in anticipated revenue from wastewater service charges, connection fees and miscellaneous sources

• $33.7 million in cash on hand budgeted for use

• No new debt funding planned for 2027-28

Capital expenses and debt service account for about 69 percent of total expenses. 

Existing LOTT debt carries interest rates of 2 percent or less. LOTT anticipates about $40 million in debt for projects later in its six-year capital plan, although specific projects and amounts remain in planning. 

LOTT Finance and Administration Director Justin Long said the agency prepared the proposal within its planned rate adjustments despite rising costs. 

“Given the pressures we’ve seen with increasing costs that I think everyone is seeing with increasing costs, we’re pretty happy with this budget and that we could make it work with our planned 3 percent rate adjustments,” Long said. 

Cost pressures 

Electricity is a major driver of expense growth. Long said proposed electric rate increases of 11.9 percent in 2027 and 3.9 percent in 2028 add about $3.1 million to the electricity budget, accounting for 47 percent of the increase in the operating budget. 

Capital spending includes $17.7 million for the second phase of improvements to the Budd Inlet Treatment Plant’s digester system, constructed in 1982, and now at the end of its useful life. Planned work includes replacing floating digester covers with fixed covers, upgrading the sludge mixing system and replacing older mechanical equipment. 

Other major projects include $7.5 million for the Martin Way parallel force main, $5.3 million for biogas utilization upgrades, and $3.3 million for pumping and emergency power improvements. 

Personnel funding provides for 95.25 full-time equivalent positions. The proposal adds three positions, including two in engineering and one in the pretreatment program. 

LOTT does not bill customers itself. Participating cities bill customers for the LOTT treatment charge and separately for sewer collection systems. 

Public comments on the proposed 2027-28 Budget and Capital Improvements Plan can be submitted ahead of the Oct. 14 hearing. The full proposal is available for review here.