City staff told the Two Rivers City Council they will propose changes to sewer utility rates to fund ongoing capital reinvestment and increased operating costs, including new requirements from state regulators and anticipated debt coverage for recent and planned borrowing.

Staff and consultant analysis presented to the utilities committee identified a roughly $120,000-per-year revenue need to maintain debt-service coverage on Clean Water Fund loans and other capital projects. Options under consideration include a modest increase to the fixed monthly meter charge, a small rise in the per-volume charge, and a revised fixed-charge schedule that assesses larger water meters at a higher fixed rate (a ‘‘meter-equivalent’’ method). The latter shifts a larger share of fixed costs onto accounts with larger meter sizes, such as commercial or industrial users.

Staff also proposed implementing the existing sewer-use ordinance mechanism to classify high-strength or high-impact dischargers as a higher category (Category B) that would pay an increased charge reflecting the greater cost to treat their wastewater. City staff said one longstanding industrial customer has posed treatment challenges and that part of the change will be to require discharge sampling and clearer separation of domestic and production waste streams to quantify the load and apply appropriate charges.

Council members asked for comparisons to neighboring utilities and for a clearer five-year capital-outlay presentation to explain why periodic rate increases are needed. Staff said they would return with a more complete draft at a council work session later this month and that the utilities committee will review prior to final action.