Mercer Island utility board weighs mid‑biennium rate increases as aging water, sewer and storm systems drive capital needs

Mercer Island utility staff and outside consultants told the city’s Utility Board on Tuesday that an extensive list of overdue capital projects and higher regional treatment charges require rate increases for the three enterprise utilities. Ben Schumacher, financial analyst for the City of Mercer Island, said city staff and FCS/Bowman consultants recommended maintaining the previously adopted plan for water and proposing smaller adjustments for sewer and stormwater after applying updated assumptions.

The recommendation presented to the Utility Board keeps an 8% annual increase for the water utility in 2026, reduces the board’s previously proposed 4.5% local sewer increase to 4%, reflects a revised King County sewer forecast that raises the county pass‑through to 7.5%, and lowers the stormwater proposal from 8% to 6%. “When we think about rate studies, they really do provide a forward looking evaluation of utility fees,” Angie Sanchez Renash, project principal for the consultant team, said during the presentation.

Why it matters: the board was shown a multi‑year capital program that staff says reflects “once‑in‑a‑generation” reinvestment in aging infrastructure. Jason (city staff) told the board the water capital list includes 27 projects with more than $38 million in funding in the 2025–26 biennium and emphasized a major new supply‑line replacement and a program to replace roughly 4–5 miles of asbestos‑cement pipe and to rehabilitate 20 of the system’s 83 pressure‑reducing valves. He said those capital needs, plus previously…