What does a Lincoln City home pay in water and sewer charges for its first 400 cubic feet of water each month? A residential customer pays only the base charge. A licensed short-term rental billed inside city limits now pays $50.68 in combined water and sewer consumption charges in an ordinary month and $58.68 in July, August and September. This month's bills are the first to show that difference.
The City Council adopted Resolution 2026-10 on September 14, 2026. It set water and sewer rates for fiscal year 2026-27 and moved short-term rentals from residential to commercial billing. Commercial accounts don't get the 400-cubic-foot allowance that comes with the residential base rate. The new rates apply to water used from October 16, 2026, and show up on November statements. Anyone pricing a vacation rental from last year's utility history is working from the old structure.
What the same water costs under each classification
The city's published rate notice gives the full schedule. A 5/8-inch in-city meter now carries a monthly base charge of $32.62 for water and $45.17 for sewer, or $77.79 combined. Above 400 cubic feet, residential and commercial accounts pay the same tiered rates. Below 400, residential accounts pay $0 in consumption charges, and commercial accounts pay $4.88 for water and $7.79 for sewer per 100 cubic feet in non-peak months. In the peak months the commercial water rate on that first block rises to $6.88.
The city's notice includes a worked example of a residential account using 725 cubic feet, with a total of $119.48. The table below uses the city's own rates to run the same usage levels both ways, for a 5/8-inch in-city meter in a non-peak month:
| Monthly usage | Residential bill | Short-term rental bill | Difference |
|---|---|---|---|
| 300 cubic feet | $77.79 | $115.80 | $38.01 |
| 400 cubic feet | $77.79 | $128.47 | $50.68 |
| 725 cubic feet | $119.48 | $170.16 | $50.68 |
Once usage passes 400 cubic feet, the gap stops growing. For a 5/8-inch in-city meter using at least 400 cubic feet a month, the difference is $50.68 in nine months of the year and $58.68 in the three peak months, or about $632 a year. Properties on city service outside the city limits pay higher outside-city rates, so the gap is larger there. The commercial charge on the first 400 cubic feet for those accounts comes to $103.20 a month off-peak.
How the cost ended up on rentals
The structure the council adopted in September was its second attempt. In June, Finance Director Debbie Bridges brought a plan based on an analysis by the consulting firm Waterworth. Oregon Coast Breaking News reported that it would have cut every residential customer's included allowance from 400 cubic feet to 200 and also moved short-term rentals to commercial billing.
According to that report, Councilor Marci Baker argued that the biggest percentage increases would land on the typical household using around 400 cubic feet a month. She said she would rather see the highest users carry the largest impact. The rate resolution failed on a 3-3 vote at the June 8 council meeting.
The version passed on September 14 kept the 400-cubic-foot residential allowance, raised base charges 6% for everyone, added tiered consumption pricing and a $2 peak-month increment, and still moved short-term rentals to commercial rates. Households that live in their homes kept the allowance June's plan would have cut in half. Rental properties lost it completely. The city's own rate tables show that shift, and it is the main reason a rental's water bill now reads differently from a neighbor's.
Why the city calls the new rates a "first step"
The city says it needs about $4 million a year in the water fund and another $4 million in the sewer fund. That money covers underground lines, pump stations, the Water Treatment Plant and the Wastewater Treatment Plant, and it would help the city borrow for a large project such as a plant expansion or a new pump station. The adopted rates are expected to bring in an additional $789,000 for water and $806,000 for sewer, and the city calls them "the first step" toward the full amount.
In the June coverage, City Manager Daniel Hunter said an earlier model showed both systems needed increases of more than 30% right away. "We couldn't come to the public with a 30% increase and expect anybody to say, 'Yeah, that sounds like a great plan,'" he told the council, as quoted by Oregon Coast Breaking News. He described the approach as smaller increases now and similar-sized increases over the next few years. Work is already underway. The Spring Lake pump station and water distribution project has Port Avenue and NE 19th Street closed from October 11, 2026, through January 17, 2027, with completion projected by March 15, 2027.
Short-term rental licenses in Lincoln City
The water premium goes with the rental classification, and in Lincoln City that classification is limited. A Planning Commission recommendation approved April 7, 2026, estimated the city had about 620 short-term rentals and about 2,050 second homes. In the two single-unit residential zones, the council capped them at 194 in R1-5 and 91 in R1-RE at Roads End, and the city's short-term rental page says both caps have been reached. According to the city's R1-5 application page, complete applications in that zone are timestamped and approved oldest first when a license opens up.
Lincoln City's municipal code says the land use approval and the operating license are in the owners' names and generally are not transferable.
The city fee schedule effective July 1, 2026, sets the license fee at $100 and annual renewal at $100, with a $150 late renewal fee. The city's transient room tax rate has been 12% since July 1, 2023.
This post is general information, not legal, tax or financial advice. Confirm how these rules and rates apply to a specific property with the city, your attorney, your accountant or your lender.
Quick answers
When did the change take effect? The new rates apply to water used from October 16, 2026, and first appear on November statements.
Do full-time residential customers still get 400 cubic feet included? Yes. Residential accounts keep the 400-cubic-foot allowance in the base rate. Base charges rose 6% for both residential and commercial customers.
Are summer bills different? Yes. In July, August and September, $2.00 is added to the non-peak water rate per 100 cubic feet, so the rental premium on the first 400 cubic feet rises from $50.68 to $58.68 a month in town.
