City consultant recommends 12% water revenue increase, year‑round tiers and major connection fee update

Kyle Stevens, a consultant with Stantec, presented a comprehensive water utility rate study to the Columbia City Council at the May 5 pre‑council meeting, recommending a package of changes the firm says will put the utility on a “sustainable path.” Stevens told council that the study identifies a revenue shortfall and proposes a 12% revenue increase in fiscal year 2026, a 10% increase in fiscal year 2027 and ongoing indexing at about 3% thereafter.

The study, Stevens said, begins “first and foremost with answering the question of how much,” meaning how much revenue the system needs now and looking five‑to‑ten years forward. It uses fiscal 2024 audited balances and the adopted 2025 budget as the starting point and excludes purchase of AMI meters from the base forecast. The model shows the current trajectory would deplete operating fund balances by fiscal 2027 without rate increases.

Why it matters: The consultant said adopting the package would stabilize fund balances and allow the utility to pay projected debt and capital needs, including a projected debt referendum in 2030 the study estimates at about $50.1 million for a phase‑two water treatment plant upgrade. Stevens told council the recommended 12% first‑year increase, combined with the rate design changes the study proposes, would stop the erosion of the fund balance and place revenues and expenditures on a more sustainable footing.

Rate design recommendations: Stevens recommended recovering roughly 30% of the utility’s annual revenue requirement…