McMinnville City government is feeling the financial pinch from years of living off reserves. Those years were mostly years of above average prosperity when reserves are expected to grow but policies have been to expand social programs instead and not stress fiscal restraint. Those years coincide with the arrival of City Manager Jeff Towery and a compliant elected City government.

McMinnville sought to implement a 9% total increase in power rates through McMinnville Water and Power, controlled by the City since 1889. The City owns the sewage treatment plant and sought increases there as well. At Monday nights’ City Council meeting the final decision on rate increases resulted in a 3% increase in electrical fees charged to industrial consumers and a 1% increase in the sewage franchise fee.

The largest customer for electricity and water is Cascade Rolling Mills. They were in a group of industries enticed by McMinnville Industry Promotions, MIP, a group of area businesses formed in 1953 which were successful in recruiting the steel mill in 1969. McMinnville Water & Light were part of the MIP and key to negotiations that brought the mill to McMinnville.

When confronted with a 3% increase in usage and another 6% increase in franchise fees Cascade (and McMinnville Water and Light) said that would result in a lawsuit. The City, with Manager Towery negotiating, ended up at 3% increase in electrical fees charged to industrial consumers and no franchise fee. The City Council approved that increase. Cascade Rolling Mills employs over 400 in high paying jobs.

Cascade, owned by Schnitzer Steel, competes in the commodity market for construction steel with prices subject to global supply and demand forces. Cascade must have controlled costs to remain viable. They have been a generous benefactor to McMinnville, home to their 400+ employees. The Citys’ initial starting point attempted to gain a 12% increase from Cascade (6% usage plus 6% franchise fee). That showed little appreciation for sharing in the financial viability of McMinnvilles’ largest primary industry. Perhaps it revealed some economic illiteracy in the City bureaucracy.

A D V E R T I S E M E N T

A D V E R T I S E M E N T

Jeff Towery has negotiated an employment contract that concludes in 2024. Perhaps his successor will have a proper economic perspective on McMinnvilles’ reliance on keeping the steel mill competitive.


--Staff Reports

Post Date: 2022-04-29 15:51:42

Last Update: 2022-04-29 16:06:10