Consultants from Davenport and Company and Jacobs presented a water and sewer rate study to the Petersburg City Council work session on Oct. 7, 2025, recommending a five‑year rolling plan that would begin with a proposed 9.5% rate increase in fiscal 2026 and use short‑term financing to temper early rate impacts.

Roland Couch of Davenport and Keith Bish of Jacobs told council deferred capital needs and debt planning drove the analysis. The study estimated roughly $190 million in deferred capital improvements, of which roughly $130 million could be funded with general obligation debt and low‑interest loans. Consultants modeled three scenarios and recommended “scenario 3,” which eliminates the payment‑in‑lieu‑of‑taxes (PILOT) transfer from the utility fund and uses strategic short‑term financing, producing the lowest initial rate increases.

Bish presented revenue and expenditure drivers and said the recommended five‑year plan would be a rolling plan that the city would reevaluate annually. He summarized recommended action: “the recommendation, is to implement, scenario 3 with a 5 year rate plan.” The consultants projected a typical single‑family residential bill (5/8‑inch meter, 5,000 gallons) would increase by about $7.50 per month on average over the five‑year period under the recommended path.

City Manager (Mister Altman) told council he supported moving forward with the rate increase: “my recommendation is council move forward with the rate increase,” he said, citing a large list of needed system replacements and a pending $21 million Virginia Resources Authority (VRA) loan that staff said might not be available without updated rates. Consultants noted the last rate increase was implemented in 2019 and that grants delayed earlier increases; they also said system collections average roughly 85% overall, with single‑family and larger accounts typically in the 90–95% range.

Council and staff discussed related topics: whether to move the stormwater fee from utility bills to the real estate tax bill to improve collection rates, and how to reduce accounts receivable. City Manager Altman said moving stormwater to the real estate tax bill is “one of the thoughts ... about how could we improve collection rates particularly on the stormwater side” and suggested staff bring an analysis to the November work session. Council also requested staff return with more detail on improving collection rates of past‑due water and sewer accounts.

Procedural step: staff said the ordinance to schedule a public hearing on the rate recommendation is on the consent agenda for the next meeting and that council will hold a public hearing on Oct. 21, 2025, to consider the proposed rate changes and the financing mechanism. No rate increase was adopted at the Oct. 7 work session.