Pasco is running out of water for new development. City fee climbs 140%
Pasco will charge developers a higher fee if they’re unable to transfer existing water rights over to the city for their new construction projects.
The city council voted 5-2 last week to increase its water rights acquisition fee by more than 140%.
Those extra dollars will go directly to a fund the city uses to buy water rights at market rate that the developers need.
Water sources in Washington belong to the public and can’t be owned by any individual or group, according to the Washington Department of Ecology. Water rights allow a person or group the use of water for a specific time, place and purpose.
For many years, the city of Pasco had been charging developers an acquisition fee of $1,725 per acre foot of needed water rights, or about a half-penny per gallon, if they were unable to sell or lease their water to the city.
But beginning this week, the city will charge them a market rate of $4,150 per acre foot, or about 1.3 pennies per gallon.
The vote also included a decision to place a 50% surcharge fee on developers or property owners who relinquished their water rights within the past 10 years and were asking the city to supply water rights for new buildings.
The change will increase the city’s ability to continue buying market-rate water rights for future development.
City staff say Pasco does not have enough water rights remaining to serve all of the new developments and projects currently in line for review and approval. The city currently leases or owns about 18,883 acre feet in water rights — about 6.2 billion gallons of potable water drawn from the Columbia River and groundwater.
The city used about 84% of that last year and will need to purchase more to meet expected growth.
WA’s fastest growing city
Pasco is among the fastest growing cities in Washington.
Over the next 20 years, the city’s population will increase by 60,000, and the city needs to add 23,000 housing units just to keep up. At the moment, there are currently more than 2,000 homes being reviewed by the city for development.
The market value of water rights has increased significantly in recent years and exceeded the city’s previous water rights acquisition fee.
The value has actually increased so much that developers are choosing to pay the city’s acquisition fee and request water service from the city, then sell their existing water rights at a higher price on the market.
“That just doesn’t seem fair to the city. We’d rather have the water rights than the fee paid,” said Steve Worley, Pasco’s public works director.
That loophole doesn’t just impact the city. It’s ultimately the water customers who are left paying the higher price tag for the city to buy new water rights, Worley said.
“The more water rights we have to purchase, the more it impacts the rate that their customers have to pay,” he said.
In another trend, property owners also are showing more interest in leasing their water rights to the city than outright selling them.
“The lease approach puts cities like Pasco in a position of owning nothing after making 20 years of lease payments, which does not seem to be a prudent course of action,” read agenda documents drafted by staff for the council.
The ordinance to increase the fee was approved by Mayor Blanche Barajas, Mayor Pro Tem Irving Brown Sr. and Council members Joseph Campos, Melissa Blasdel and Zahra Roach. Councilmen Pete Serrano and David Milne voted against the ordinance.
Serrano and Milne supported delaying the vote until after the new year to garner more feedback from developers and new city council members. City staff hosted a meeting with developers on Oct. 23 to discuss the revisions, but some felt one meeting wasn’t enough to flesh out the issue.
This story was originally published December 4, 2023 at 5:00 AM.
