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Coldwater presents 2026 utility forecasts; proposes modest water and wastewater rate increases
Summary
Staff presented a preliminary 2026 financial forecast for electric, telecom, water and wastewater funds, including proposed rate adjustments (3.9% water, 3.5% wastewater), capital plans and a possible large wastewater bond issuance in 2026.
Staff presented preliminary forecasts for the utility funds and described capital spending priorities and potential rate changes for fiscal 2026, but asked the board to make no decisions at this meeting.
Tom Eldridge, staff member, summarized forecasts: projected electric revenue of $53 million based on current usage with no growth factor or assumed rate change; a power‑cost projection from AMP at about 8.2 cents per kilowatt hour and an expected 481 million kWh of usage yielding roughly $38 million in purchased power costs. Eldridge noted power‑cost adjustment (PCA) effects on bills and that AMP’s estimate historically trends high.
On the water and wastewater side, staff proposed a 3.9% water rate increase (projected to yield about $160,000) and a 3.5% wastewater increase (about $200,000) based on a recent cost‑of‑service study by Utility Financial Solutions. The water forecast anticipates capital spending of about $1.6 million, led by the North Clay Street water‑line replacement and continued lead/copper service line replacement work; the wastewater capital forecast included roughly $3.2 million tied to plant upgrades and engineering for an anticipated expansion.
Staff said the telecom fund will show a lower revenue forecast ($2.3 million) as an older service (Skitter) is removed; internal interfund rates to other departments will increase 3 percent. Eldridge said existing wastewater cash balances are healthy because the utility has incrementally increased rates in prior years to prepare for a potential expansion project and that a debt issuance for wastewater engineering and construction is currently modeled for April 2026 if approved.
Eldridge said no rate decisions were being requested at this meeting and that the board will receive a formal presentation from Utility Financial Solutions at a future session; any board action on budgets is anticipated at the May meeting followed by City Council adoption in June.
