Council approves 19.72% increase in wastewater rates to fund treatment plant renovation

During the recent City Council meeting in Vermillion, South Dakota, officials discussed a significant resolution to adjust wastewater rates, a necessary step to fund upcoming renovations to the city's wastewater treatment plant. The proposed increase, which would raise rates to 170% of the current billing, translates to an average monthly increase of 19.72%, bringing the typical bill from $43.90 to $52.56 for households using approximately 4,347 gallons of water.

This adjustment is part of an annual review process that considers changes in water consumption across rental units. The last adjustment occurred in April 2024, when rates were raised by 142%. The council emphasized the importance of these adjustments to ensure fairness and sustainability in the community's wastewater management.

The proposed increase is also tied to the city's budget requirements and the financial needs for the renovation project, which is estimated to cost around $23 million, including $3 million for engineering. The council noted that further increases may be necessary in April 2025 to adequately service the debt incurred from the renovation.

A key point of discussion was the impact of a $5 million grant from the Economic Development Administration (EDA), which the city is currently working with. Council members expressed confidence that the grant would not be jeopardized, as a signed agreement is already in place. However, concerns were raised about potential worst-case scenarios, including a possible additional monthly increase of $31.25 per user if the grant were to be frozen.

The council's discussions highlighted the careful planning required to balance immediate financial needs with long-term infrastructure improvements. The wastewater treatment project is expected to span two years, with a debt repayment period of 30 years. As the city prepares to move forward with bidding for the project, the council aims to implement gradual rate increases to mitigate the financial burden on residents.

In conclusion, the council's resolution to adjust wastewater rates reflects a proactive approach to managing the city's infrastructure needs while ensuring that residents are informed and prepared for upcoming changes. The council plans to revisit the rate structure after receiving bids for the renovation project, allowing for adjustments based on actual costs and funding availability.