Sewer fund staff recommend 8% rate increases two years running; council directs public feedback and expands utility assistance program

Reno officials told the City Council on April 9 that escalating treatment and construction costs have left the Sewer Enterprise Fund on a path to insolvency unless rates are raised.

Key finding: Regional Infrastructure Administrator John Flansberg said construction costs for water and wastewater projects have risen about 41.4 percent since 2019 and that chemicals such as chlorine have jumped significantly (Flansberg said, "chlorine ... the cost of chlorine since 02/2019 has gone up by 300%"), driving a capital program that totals nearly $1 billion over 20 years. Flansberg said staff and consultant Dow recommended an 8 percent user‑rate increase in October 2025 and another 8 percent in October 2026, followed by CPI indexing thereafter; the two‑year package would maintain operating reserves and keep the fund solvent under the current capital plan.

Affordability measures and assistance Flansberg proposed renaming and expanding the existing sewer rebate program to a "sewer utility assistance program," adding SNAP eligibility to the qualifying benefits, making the application available year‑round instead of a two‑month window, and initially increasing the program budget from current levels toward a proposed $200,000 to start ("we thought we could do it maybe go 200,000 at first," Flansberg said). He said the program has historically issued one‑time annual credits (the single‑family credit was about $221 in the most recent year) and that roughly 86 percent of households would still fall under a commonly‑used 2 percent‑of‑income affordability threshold under the proposed increases; staff estimates the median household income used in the analysis at $78,448.

Council direction Council voted unanimously to direct staff to initiate a community‑feedback process on a potential rate increase and to bring back an ordinance for consideration with the public input. Council also unanimously instructed staff to return with a resolution to formalize the sewer utility assistance program and to consider expanding the program budget; staff proposed a first‑step increase to roughly $200,000.

Numbers and impacts - Proposed rate change: 8% increase in Oct 2025 and 8% in Oct 2026, then CPI annually. Staff said that equals roughly a $14 per quarter increase for a typical single‑family account in the first step and about $15 the next year (approximately $5/month). - Fund health: Without the proposed increases, staff model shows the Sewer Fund falling below minimum reserves by 2028 under the current capital and operating plan. Staff proposed some CIP timing reductions and cutbacks to collection system replacement to preserve essential near‑term work while limiting the rate request.

Ending Council asked staff to stage robust community outreach (public meetings, QR code survey, mailers on sewer bills) and return with the ordinance and sewer‑assistance resolution; staff said the ordinance would be brought back with the public feedback for council consideration.