The Board of Public Works on Monday voted to recommend that the Common Council adopt a two-step increase to the city’s stormwater utility rates, beginning July 1, 2025, with a further increase effective Jan. 1, 2026.

The recommendation follows a rate study prepared by Trilogy Consulting that found current stormwater charges — unchanged in practice since 2012 — do not cover ongoing operation and maintenance expenses, routine capital renewals or needed reserves. The board’s endorsement will be forwarded to finance and policy committees and ultimately to the Common Council for final approval.

Trilogy Consulting’s Christy DeMaster, who led the study, told the board the utility was established in 2011 and the city initially set a rate well below the level the original study recommended. “We believe that these proposed rates would allow the utility to really fully fund all of the stormwater management activities and services for the first time,” DeMaster said during a slide presentation to the board. The report said the quarterly charge per equivalent runoff unit (ERU) would increase to $29.66 in July 2025 and to $36.18 in 2026, with 3% annual inflationary adjustments thereafter.

Tina Erickson, Utilities Finance and Compliance Manager, explained the policy and accounting changes that increased costs borne by the stormwater utility. Erickson thanked DeMaster for the analysis and said recent city ordinance changes shifted 100% of stormwater operating and capital expenses to the utility. Erickson said the proposed schedule would allow the utility to cover current O&M immediately, begin cash-funding routine capital in 2026 and rebuild reserves by 2027.

Board members raised questions about administrative cost allocations and whether some of the recent spending growth reflected payroll and equipment reallocation rather than new projects. “There’s many expenses that were actually stormwater related that previously were being paid for,” Erickson said. She said crews and equipment that work on all three utilities have been reallocated so stormwater pays its share of labor, vehicles and supplies.

Director Trane moved the resolution to support the study and recommend the rate change; Council President Dickinson seconded. After brief discussion the board voted, with the chair announcing, “That’s 3 ayes, 1 no, and the motion passes.”

The study estimated average residential impacts of about $5.40 per month in 2025 and $2.17 per month in 2026 (roughly $7.57 total across both changes) for a typical single-family home billed as one ERU. The report also summarized historical figures: annual routine capital outlays averaged about $3.2 million recently; current stormwater revenues covered about $3.9 million while grants and tax-increment financing covered roughly $4.5 million and reserves supplied about $4.3 million of the last four years’ capital spending.

The consultant and staff said the city’s MS4 (municipal separate storm sewer system) permit obligations and ongoing street and DOT projects have driven capital needs. The board discussed continuing public education and annual MS4 reporting to the council; staff said the DNR permit requires annual reporting and that staff will present performance indicators and financial updates at budgeting time and return to a full rate review about five years from now.

The board’s vote sends the resolution to committee with a recommendation; final approval of any rate ordinance change rests with the Common Council. The study recommends a full rate review in 2029 to reassess the utility’s financial health.