Arvada council signals support for mid‑range rate scenario as staff outlines CIP, debt timing

Arvada City Council members and city utility staff met Aug. 12 to review four water, wastewater and stormwater rate-and-fee scenarios for 2026 and the capital improvements those scenarios would fund.

The meeting focused on how different combinations of volumetric (usage) and fixed charges, together with potential bond issues, would pay for projects in the city’s 10‑year capital improvement plan (CIP). Staff presented two “bookend” scenarios (minimal and fully funded) and two middle options; multiple council members said they favored the middle option labeled scenario C.

Why it matters: the scenarios change which capital projects move forward and when the city would need to issue debt to pay for them. That affects rates now and in future years and the timing of projects such as trunk‑line repairs and large waterline replacements.

Jacqueline Rhodes, Arvada’s infrastructure director, led the presentation and said the staff team tightened operating budgets before updating the scenarios. Rhodes summarized the four scenarios, noting that scenario A is minimally funded while scenario D would fully fund the CIP; she said staff developed two intermediate options in response to council feedback. Rhodes told council the team recommended deferring the pump‑zone surcharge work to the next cycle because “this is a complicated project to scope.”

Chris Gray, utilities business manager, walked council through the numeric impacts of the scenarios. For the water fund in staff’s presentation: scenario A included a 4% volumetric increase and no fixed increase (a combined 3.4% revenue change for 2026 in staff’s model); scenario B uses a 4% volumetric increase and an 18.3% fixed increase (staff showed a roughly 6% overall change and proposed raising the bimonthly fixed portion from $21.83 to $25.83); scenario C uses a 5% volumetric increase with the same fixed increase (about a 6.9% combined change in staff’s summary); and the fully funded scenario (D) used a 7.5% volumetric increase plus the 18.3% fixed increase (about a 9% combined change).

Gray also described modeled future debt in some scenarios: staff’s materials show proposed debt issuances in later years (examples discussed in the workshop included multi‑year debt planning with large potential bond issues in 2028 and 2030). Council members repeatedly emphasized that approving a rate scenario in 2026 would not itself authorize future bond sales; Rhodes and Gray said the city would return to council for any debt authorization when that year arrives.

On CIP presentation and priorities, staff provided a condensed one‑page CIP that groups like projects together (for example, rolled‑up raw water pump station upgrades). Rhodes said staff will “peel out” waterline projects in future cycles so council can see which replacements are most likely to prevent public‑health events; the current CIP lists an annual water line replacement program totaling about $97,000,000 across the 10‑year horizon. Mary Stahl, engineering/utilities manager, explained the boil‑order risk: “We have a risk of a boil order every time we have a break…dependent on the severity of said break, is the risk of boil order.” Staff said pipe age and material guide prioritization but do not perfectly predict breaks.

Staff walked through the 10‑year funding chart showing expenses, planned debt service, operating costs, and where fund balance would be used if revenues and bond proceeds do not fully cover projects in a given year. Rhodes and Gray said the 2025 bond issue will create near‑term available funds the city will spend over the next several years; additional bond issuances in 2028 and later would be proposed only when council is asked to authorize them.

Council members asked for clarity on the link between approving a rate scenario and the city’s future ability to issue debt. Council Member Pfeiffer pressed staff to make clear in messaging that choosing a higher scenario aligns the long‑term rate trajectory with later debt needs but does not itself grant immediate borrowing capacity. Rhodes concurred and repeated staff’s position that future debt authorizations would come back to council.

Discussion versus formal action: the workshop did not adopt a rate ordinance or approve bond sales. Council did take procedural votes at the start (excusing the mayor and mayor pro tem and electing Council Member Rupert to preside), but there was no formal vote on 2026 rates. At the end of the workshop Rhodes summarized council direction, and staff said they heard a majority preference for scenario C and will reach out to absent members before finalizing affordability program changes and return with ordinance language at the scheduled first reading and public hearing dates.

What’s next: staff listed next steps and schedule — an additional workshop Sept. 9 if council wants more detail, a first reading of a rates ordinance Oct. 6, and a public hearing and final decision Oct. 20. Staff said they will return with a clearer CIP breakout (including prioritized waterline projects) and will bring pump‑zone surcharge scoping back in the next cycle.

Discussion highlights (selected): council members expressed interest in automated recurring customer payments (to reduce delinquencies), a desire to protect fund‑balance pacing to match construction capacity, and differing views on how much to accelerate funding now vs. defer projects later. Staff said they are watching contractor capacity and staffing to align project delivery with planned bond issuances.

Ending note: no ordinance was adopted at the workshop; staff will incorporate council feedback into final materials to present at the scheduled October readings.