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Council told wastewater budget includes 6% rate increase tied to consent-decree capital plan
Summary
City staff and the wastewater director outlined a FY26 wastewater budget driven by consent-decree capital work; staff said the utility plans a 6% rate increase this year under its multi-year financial model and described regional customer agreements and capital timing that influence rates
City staff told the Chattanooga City Council that the wastewater enterprise fund will raise rates by 6% in FY26 as part of a multi‑year financial plan tied to consent‑decree capital projects and ongoing regulatory compliance.
The wastewater proposed budget for FY26 was presented as about $151,700,000 with no net change in authorized positions; staff said $59,100,000 will transfer into capital to fund ongoing projects.
“The rates that you see there … have been programmed in since the beginning of the consent decree,” the wastewater director said, describing a multi‑year rate trajectory driven by consent‑decree projects and regulatory obligations. He added that past annual increases were as high as 9% and that the planned increases have been trending down as projects are completed.
Council members asked how regional partners and neighboring jurisdictions contribute to the utility’s costs. Staff said the city has intergovernmental agreements with surrounding jurisdictions that pay for treatment and a regional share of capital projects; those payments vary with flows and with repair work in partner systems.
Council members requested clearer public communications about future rate changes so council members can explain increases to constituents. Staff agreed to provide additional outreach and to include rate projections and the underlying capital schedule in follow-up materials.
