Consultant: South Beloit sewer utility needs roughly 45% revenue increase to cover repairs and lift‑station work

Caroline Quism of consulting firm Fairgram told the South Beloit City Council on June 16 that the city’s sewer utility is operating below a fiscally sustainable revenue level and will need a substantial revenue increase and capital investment to address failing lift stations and other deferred maintenance.

Quism said the system brought in about $2.8 million in the most recent year but that a commonly used fiscal benchmark shows the utility should be near $4.0 million to meet operating costs, depreciation and debt service. “You need to increase your revenue by about 45%,” Quism told council members as she described scenarios that phase increases over five years to reduce immediate shock to customers.

Why it matters: council members and staff said the most urgent capital item is a failing lift station and associated force main that could require temporary trucking, emergency work and costly penalties if it fails while discharging to the Rock River. Council members and staff repeatedly framed the lift‑station repair as mandatory to avoid regulatory enforcement and emergency operating costs.

Details from the study and council discussion: - Current system revenue (most recent year): about $2.8 million; consultant’s minimum required revenue: about $4.0 million (approximate). (Caroline Quism) - Quism presented two project cost estimates that materially affect rates: a Class A sludge upgrade now estimated at about $3.7 million (previously estimated at ~$1 million) and lift‑station improvements (discussed around $11.04 million). Quism cautioned these are project estimates and subject to market change. - Quism said the study translated needed revenue into customer impacts and phased rate increases over five years. For metered users, one illustrative wholesale-type transport metric shown in the presentation was roughly $24 per 1,000 gallons in a modeled scenario; using a standard engineering consumption figure (100 gallons per person per day), a family of four at 12,000 gallons per month would see billing comparable to about $260 per month under that level (presented as an engineering example, not a formal bill schedule). Quism also showed nonmetered bills could approach about $129 per month in five years under the modeled scenario. - The consultant stressed that existing debt service is the dominant driver of future rate pressure; adding new loans for projects will increase costs but the legacy debt is the larger, controlling factor in the near term.

Council members asked for clearer, resident-facing materials. Mayor and council members repeatedly requested documentation that explains why the lift station is necessary, what immediate alternatives would cost (for example, temporary trucking), and the consequences of inaction, including potential EPA enforcement. Public works staff and council noted that previous assumptions about a large industrial customer’s continued payments had masked the shortfall when that customer left.

Outcome and next steps: Council treated the presentation as informational and agreed to lay the rate discussion over for additional analysis and community education. Staff and the consultant will provide more detailed, resident-facing cost comparisons, clarified project estimates (Class A sludge and lift‑station options), and an implementation timetable before any ordinance or rate‑setting action is brought back for formal vote.

Ending: Council members emphasized they intend to give residents clear context — that the lift station represents an essential repair and that projected rate changes follow from both that immediate repair need and longer-term undercharging of the utility.