Westminster budget workshop focuses on utilities bond, cash reserves and possible rate increases

City staff outlined a multi-year utilities capital plan and financing options Tuesday at the City of Westminster budget workshop, saying the city may seek up to $5 million in borrowing to pay for electric undergrounding and SCADA work, water-line replacements, wastewater manhole rehabs and other projects while also urging council to rebuild cash reserves reduced by hurricane response costs.

The presentation, led by a city staff member during the Feb. 11 workshop, said federal reimbursements tied to Hurricane Helene were not yet in hand and that FEMA-eligible costs now expected to be reimbursed total about $200,000, plus or minus $15,000. Excluding FEMA reimbursements, staff estimated the city’s combined utility days-cash-on-hand would fall to roughly 61 days; staff said the municipal goal is 90 to 120 days and calculated the city is about $2 million short of the upper end of that target.

Staff told council the city closed out a prior USDA loan late in 2024, which was a prerequisite to exploring additional combined-utility indebtedness. The staff member said bond counsel and the city’s financial adviser have been notified and that staff will prepare an RFP to seek loan or bond terms if council directs them to proceed. City staff estimated issuance-related legal, financial and bank fees for a $5 million financing at about $150,000 and described $5 million as a not-to-exceed maximum rather than a firm final project total.

Why it matters: staff said restoring cash reserves reduces the risk that the city must defer critical repairs or impose larger, sudden rate increases. The council heard that utility capital needs — many driven by aging water mains, manholes and the electric system’s exposure to storm damage — compete with requests for pay increases, vehicles and other department priorities.

Discussion highlights and project details

- Bond purpose and timing: Staff framed a potential $5 million utility bond or loan as a tool to fund a package of priority projects: undergrounding electric lines (staff used $1.5 million as a plug figure for an electric underground/SCADA effort), a SCADA system for the electric system (to improve remote monitoring), water-line upsizing and looping (Lucky Street, James Street and the Oak Street area), water-tank improvements (prior estimate ~ $650,000), wastewater manhole rehabs (per-manhole rehab estimates range from $25,000 to $75,000), a downtown streetscape utilities match and other contingency work. Staff emphasized the $5 million was a maximum and that they were working to reduce the project total below that cap.

- FEMA and cash-flow risk: Staff said that FEMA reimbursements are delayed and that some reimbursable line items include work hours and equipment rates (staff noted FEMA allows modest reimbursement for some tool use, e.g., a nominal fee for a chainsaw). Staff said they expect to have reimbursement requests assembled by March and that actual receipt of funds could take significantly longer.

- ARPA and other grant funding: Staff said prior Oconee County ARPA money had been used in 2023–24 for water-plant improvements and that some of those costs were recorded in capital accounts rather than in operations, which affects how the 2025 budget appears on slides. Staff also described a $492,000 “skip match” amount currently held in the bank that could be used in sequencing with other grants for sewer and streets.

- Operating reserves and rates: Staff recommended building contingency and reserves incrementally, proposing disciplined budgeting and a modest rate approach (staff suggested 3–4% as a likely range and said the city had used 5% in prior years). Council members signaled reluctance but expressed willingness to consider modest increases if staff can justify them; one council member said they preferred to delay rate increases until they are needed rather than raise rates preemptively.

- OJRSA and sewer consent order: Staff reminded council of an outstanding consent order for the sewer system with the Oconee Joint Regional Sewer Authority (OJRSA) and said regional planning work and future OJRSA recommendations could affect rates and capital needs.

Other operational notes

- Backup generator projects: Staff said backup-generator bids were submitted but reviews by the South Carolina Emergency Management Division had delayed approvals for roughly five to eight months; staff noted they did not want vendors to order long-lead generators until state approval arrived because of grant terms.

- Sidewalks and paving: Staff reviewed past sidewalk rehabilitation funded through a SCDOT/C-Fund allocation and described challenges packaging paving projects after small contractors were acquired by a larger firm.

- Equipment and debt: Staff said the city has already issued a lease-purchase for an electric truck and is evaluating debt-service timing; payments on any new debt will depend on bank terms and might not begin for six months to a year after closing.

Votes, outcomes and next steps

Council did not approve any new borrowing at the workshop. Staff said they will prepare a reimbursement resolution (to allow the city to spend funds and later reimburse them from borrowing) and will return with refined cost estimates, RFPs for financing and updated project bids. Council instructed staff to continue sequencing projects and to return with more precise numbers in subsequent budget workshops. The meeting ended on a procedural motion to adjourn that was moved, seconded and called; the motion carried (names not recorded in the transcript excerpt).

Ending

Staff asked council for feedback on the level of rate increases and contingency to include in the proposed budget; staff said they will present a PMPA benchmarking report and updated project estimates in subsequent workshops and will circulate the full spreadsheets and footnotes used for the presentation.