Staff previews modest water and sewer rate increases to shore up funds

City staff told the Pataskala utility committee that both the sewer and water funds will need modest rate increases to avoid a projected multi-year decline in fund balances, and staff will return with specific options and bill models for committee review.

Joe, a city staff member leading the rates discussion, described graphs showing revenues and expenditures trending toward an undesirable fund balance dip over the next four years if no action is taken. "We're going to present some plan, some direction to improve this starting in 2026," Joe said.

Joe said the sewer fund forecast does not yet include final operating costs for the planned wastewater plant expansion; once the new plant's running costs are known, those expenses will be folded into future rate models. He said staff would gather estimated operating costs during the design phase and include those numbers in future presentations.

On household usage, staff gave an average residential consumption figure: "Our average in our area is about 5,000 gallons," Joe said. Committee members discussed whether to protect typical residential users with smaller increases while shifting a larger share of cost increases to high-usage commercial customers. Staff said a tiered-rate approach had been tried previously and encountered public- and administrative-resistance; staff advised that tiering can be difficult to administer and can produce steep bill increases for some commercial accounts.

Committee members asked staff to compare Pataskala's rates with similarly sized utilities and with neighboring suppliers so the city can assess whether proposed changes would produce large disparities across adjacent service areas. Staff noted that capacity fees from new development will flow to development-related funds and will not directly offset user rates.

Joe said staff have a target fund-balance range and are considering options to bring balances into healthier levels; one stated planning target discussed was a $1,000,000 fund balance and a goal to keep the operating fund no worse than roughly 50% of prior-year expenditures. Specific bill impacts for a 5,000-gallon household were not yet calculated; staff said they will return with numbers and multiple increase scenarios for committee review.

Next steps: staff will prepare a set of rate-change options, modeled monthly bills at common usage levels (including 5,000 gallons), and comparisons to similarly sized utilities. The committee signaled support for using a staged or alternating increase model ("one year on, one year off") as they refine options, but no formal rate change was adopted at the meeting.