Waterloo staff propose 5% sewer-rate increase as city exits EPA consent decree; multiple plant and lift-station projects outlined

Bridget Wood, the city finance director, proposed a 5% increase in sewer rates for fiscal 2026 and told the council the boost is intended to preserve Waterloo’s eligibility for State Revolving Fund (SRF) financing and cover upcoming wastewater projects.

"So for fiscal 26, we're looking at, a 5% increase for sewer rates," Wood said during the council meeting. She said the proposed increase would keep Waterloo "still at the lowest of the largest 10 communities," assuming those peers do not adopt rate changes.

The proposal follows a multi-year pattern of increases: council members noted last year’s increase was 8% and the year before was 5%. Wood said staff expect the city will likely need similar increases in coming years but cautioned the exact percentage could change as project plans firm up.

The rate discussion was paired with a multi-point update from wastewater staff on projects and regulatory status. Jesse Gearty, collections systems projects director, said Waterloo has been released from a federal consent decree and that future regulatory oversight now rests with the Iowa Department of Natural Resources.

"As of last, the fifteenth, last week, we are actually considered out of the consent decree as of now," Gearty said, adding that the city will continue to report to the Iowa DNR rather than to the U.S. EPA and that some duplicate reporting requirements will cease.

Gearty and Brad Manal, treatment operations supervisor, outlined capital needs they said the rate increase would help address. Staff described the pretreatment lagoon that treats most of Tyson Fresh Foods’ wastewater as a priority: the lagoon’s cover (installed after a 1998 windstorm on a basin built in 1992) and internal gas-handling equipment are deteriorated, grease buildup under the cover must be removed, and blowers, controls and safety equipment need replacement.

Staff said an earlier plan to have a private developer capture methane from the plant through an RNG (renewable natural gas) project did not proceed because the company and Tyson could not reach an agreement. Gearty said that shortfall reduces anticipated revenue and left the city responsible for the lagoon work.

Gearty also reviewed lift-station and force-main projects: the Cattle Congress force main required archaeological study because the site is historically sensitive; the archaeological dig found no features that require further study, and staff said the next step is a public hearing to move funding forward. The Airline lift station, serving a commercial area, needs upsizing of the force main to handle expected growth. A Highway 63 "can" lift station will be rebuilt to bring equipment to surface level to improve worker safety and monitoring.

On the Titus station, staff reported the project is at substantial completion and already operating; Manal said the new routing bypasses the Virginia neighborhood station and should reduce odors experienced there.

Other program-level work noted included continuing cured-in-place pipe (CIPP) work to address inflow and infiltration (staff said the city now budgets about $1 million per year for CIPP, up from about $500,000 previously) and replacement of aging pumps and sewer cleaning vehicles (staff cited examples of pumps estimated at roughly $160,000 and $210,000).

Staff and council members stressed these upgrades are intended to reduce maintenance costs, improve energy efficiency and increase system capacity for economic development. Wood said the proposed rate increase is based on a pro forma prepared with Spirit Financial that factors SRF loans and anticipated project costs; she said the city must show a certain revenue level to pay debt service and remain eligible for SRF financing.

The sewer-rate increase was presented as a proposal; no formal vote on the rate increase appears in the meeting transcript. Staff asked council members whether they had questions and agreed to provide a comparative chart of peer-city rates showing the large communities used for benchmarking.

What happens next: staff identified project design and engineering as the next steps for many items; project timing and final cost estimates will depend on engineering results, procurement and any future funding agreements. Council members and staff discussed the possibility that future increases could exceed 5% depending on evolving project scope and funding outcomes.

The meeting also included routine finance-committee business and pre-authorizations for equipment purchases and repairs, but the sewer-rate presentation and the wastewater capital program dominated the substantive discussion.