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Coldwater OKs water and sewer rate increases to shore up cash and debt coverage
Summary
City council approved a 3.9% increase to water rates and a 3.5% increase to wastewater rates effective July 1 after a cost-of-service study showed falling cash balances and debt-coverage pressure ahead of planned plant work.
The Coldwater City Council voted to increase water rates by 3.9% and wastewater rates by 3.5%, effective July 1, following a presentation from city staff on utility finances and upcoming capital needs.
Paul, a staff member presenting the study, told the council, “I am here to present tonight, water and wastewater increases.” He said the study examined operating cash balances and debt-coverage ratios and modeled scenarios with and without rate changes. The presentation showed the city’s operating cash target for utilities at roughly $2,300,000–$3,100,000 and that without increases those balances and debt-coverage ratios would decline.
The wastewater analysis included planning for a possible future bond issue and wastewater-plant improvements. The presentation noted a planning assumption of up to $30,000,000 of debt for later phases of plant work; staff said that under a 0% increase the resulting debt-coverage ratio could fall to about 1.45, with a 3.5% increase improving the ratio closer to recommended levels. For water, the staff recommended a 3.9% increase; an average residential customer with a 5/8-inch meter and typical usage around 5,000 gallons would see roughly a $1.40 per month increase if usage remains constant.
Council members asked follow-up questions about infiltration and system repairs. Paul said the city has reduced infiltration through lining and repairs but still sees some inflow during storms and that additional pipe work (including possible pipe bursting) is under consideration. He confirmed he would provide figures on peak daily treated volumes and the portion attributable to storm inflow upon request.
Councilmember Travis moved to adopt resolution 25-48 to implement the proposed increases and Councilmember Randall supported the motion. The motion passed by voice vote; the record shows the council approved the rate increases and staff said the changes would take effect July 1.
Council members and staff framed the increases as steps to maintain adequate cash reserves and debt coverage as the city plans future capital work at the wastewater plant and infrastructure replacements such as the North Clay project.
