St. Louis Water director warns of aging pipes, rising delinquencies as master plan begins

A day without water, what would that be like? Director Neeraj Patel, head of the St. Louis Water Division, asked the Public Infrastructure and Utilities Committee on June 11 as he outlined the utility’s fiscal year 2025 review and near-term work.

Patel told the committee the Water Division has executed a $1,275,000 contract to produce a 20-year water master plan that will inventory infrastructure, update hydraulic models, forecast demand and identify a capital renewal plan. He said the plan will inform but not replace a separate cost-of-service and rate-sufficiency study the division must complete to satisfy bond indentures and to evaluate future rate changes.

The nut graf: Patel said the division faces substantial deferred capital needs and system stress — an average of about 340 main breaks a year, a transmission assessment estimated at $5,000,000, and a lead-service-line replacement universe that could cost in the hundreds of millions — while roughly a quarter of billed accounts are delinquent.

Patel outlined key fiscal and operational figures. The utility reports roughly 12,600 metered accounts and about 77,992 flat-rate accounts; it sold less wholesale water in FY25 than the prior year. He said average residential bills were intentionally kept low and that a two-year, iterative 20% rate increase enacted in 2023 produced modest monthly bill increases for typical customers. The division projects a 3% automatic adjustment for 2026 built into FY26 revenue assumptions.

Patel described several near-term and regulatory priorities: completing the master plan, integrating a $75,000–$150,000 cost-of-service scope into the required rate-sufficiency study, expanding the lead-service-line inventory and field verification work funded in part by federal grants, and preparing for potential regulatory changes such as revisions to the lead and copper rule and consumer confidence-report requirements. He said the Water Division does not yet detect PFAS in its source water but monitors for more than 150 contaminants.

On lead lines, Patel said the division has a grant-funded inventory and is moving to a field-investigation phase that will test tree‑lawn excavations and include outreach. He cited an estimate of about $10,000 to replace a service line and noted a potential universe of tens of thousands of lines — a program that could scale to hundreds of millions of dollars if full replacement is required.

Patel also described system performance and finances. The city’s water system averaged roughly 340 main breaks annually (about 26 breaks per 100 miles), above a cited national average of 15 per 100 miles. The division averaged roughly $42,000 in account write-offs in FY24. Delinquencies had climbed to about 25 percent of billed amounts, a total the director described as “over $10 million” subject to daily fluctuation. Patel said the department is developing outreach and a customer-assistance program, funded in part with ARPA dollars, to help customers bring accounts current and reduce the need for shutoffs.

Committee members pressed on collections and affordability. Alderman Boyd asked whether the department has finalized senior-targeted assistance; Patel said a customer-assistance program is near rollout but that, in the interim, staff handle municipal payment plans and other individual arrangements. Several aldermen emphasized both the quality of St. Louis water and the need to act on long‑term capital needs and on collection practices so ratepayers do not subsidize unpaid service indefinitely.

Patel said the division has applied to the State Revolving Fund and been placed on a fundable list; he described potential bond issuances as revenue bonds that must be supported by the utility’s rate structure and financial position. The division projects taking $4.1 million from its contingent fund in FY26 under current assumptions and emphasized that reserves have been used as a de facto capital source in past years.

The presentation closed with operational notes: both treatment plants have long track records of meeting standards, the division has maintained timely audits for more than a decade, and hiring remains a challenge with roughly 275 of a 365 authorized positions filled. Patel said the master plan kickoff is imminent and said the study will produce a prioritized capital list and cost estimates to inform future rate and financing decisions.

Looking ahead, Patel told the committee the division will use the master plan to shape the cost-of-service study and to better position the utility for SRF financing and potential revenue bonds, while rolling out the customer assistance effort in the coming weeks.