Independence reviews two sewer‑rate options to fund $25 million capital plan and meet reserve policy

Alex Craven, project manager for 1898 & Company (part of Burns & McDonnell), told the Independence City Council that the city’s sewer utility needs additional revenue to fund a roughly $25 million capital improvement plan for 2026–2030 and to meet a council‑adopted minimum cash reserve policy.

Craven said the consulting team prepared two multi‑year rate scenarios. Option 1 generates higher annual revenues, fully funds the adopted capital improvement plan and reaches the city’s target cash reserve one year earlier; the consultant recommended Option 1. Option 2 would produce lower annual revenue, require roughly $5 million less capital spending from the CIP and reach the minimum reserve at the end of the forecast instead of a year sooner.

The presentation matters to ratepayers because it would increase typical monthly sewer bills. Craven showed an example customer using 600 cubic feet of flow per month: under current rates that bill is $57.21; under Option 1 the example bill would rise to $62.70 in 2026 and under Option 2 to $61.32 in 2026. Craven and staff said they are not proposing structural changes to the rate design—metered monthly service charges and a volumetric charge per 100 cubic feet remain—but proposed rate levels would be adjusted.

Background provided by Deputy City Manager and Municipal Services Director Lisa Reynolds said the council last approved a multi‑year sewer rate increase package in 2016 that took effect July 1, 2016; there have been no rate increases since 2020. The consultant used a financial plan and a cash‑flow forecast to translate utility needs into required annual revenue. Craven said the forecast assumes roughly 5% annual operating cost inflation and uses the city’s staff‑developed capital plan.

Craven summarized the drivers behind rising sewer costs: lower per‑account water use (reducing variable revenue), general inflation on operating and capital costs, more stringent water‑quality regulations passed down from federal and state agencies and aging underground infrastructure that requires renewal and replacement. He said the adopted capital plan is dominated by collection‑system renewal and treatment‑plant and pump‑station work; in later years the plan includes a program to upgrade bio‑nutrient removal at the Rock Creek Treatment Plant to meet anticipated regulatory requirements.

Council members asked technical questions. A councilmember confirmed that the existing regulatory compliance fee (used to repay debt from a prior federal consent decree) remains unchanged; staff said the fee rose by $3 increments from $3 to $6 to $12 and will remain in place until that debt service is paid. Staff said the city issued about $90 million of debt related to the consent decree, and the remaining debt service is scheduled to end in 2042 after previous refundings shortened some issuances.

Lisa Reynolds and Craven provided scale details: the system includes about 615 miles of sanitary sewer mains, 13 lift stations, and the Rock Creek Treatment Plant, which averages roughly 7 million gallons per day of treatment capacity (10 million gallons per day design) with up to about 30 million gallons per day during large rain events; the system also has approximately 20 million gallons of storage across four tanks. Craven said the consultant used the city staff CIP and estimated roughly $25 million in capital needs from 2026 through 2030.

The presentation also suggested adopting a CPI‑based automatic adjustment after the proposed multi‑year rate path ends as a way to preserve revenue resilience; councilmembers asked whether such an index could be capped so extreme inflation spikes would require additional council action. Craven said caps or supervisory triggers are a policy decision and that communities commonly design CPI adjustments with caps or council review provisions.

No formal rate ordinance or motion was presented or adopted at the meeting; the consultant recommended Option 1 and councilmembers asked for follow‑up examples on CPI‑based escalator designs and comparison scenarios. Staff noted the matter had been presented to the Public Utility Advisory Board on July 10 and that the board will be asked for a formal recommendation in a later step.

Ending: The council heard the study, asked follow‑up questions about debt, regulatory drivers and CPI escalator designs, and took no formal action; staff and the consultant said they will provide additional information and seek the advisory board’s formal recommendation.