Montgomery reviews $27.4M plan to finance water and sewer projects, considers rate increases and 20- vs. 30-year terms

The City of Montgomery City Council discussed on Oct. 14 plans to finance roughly $27.4 million in water and sewer projects and a proposed package of water and sewer rate increases that staff said would generate about $1.1 million in additional annual revenue.

City staff told council members the $27.4 million estimate covers immediate projects at the water plant, sewer plant and supporting infrastructure, and presented two amortization options: 20-year and 30-year schedules. Staff said the proposed rate changes — including higher charges for single-family, commercial and institutional customers — would raise revenue enough to support a bond issue and debt service but would represent a significant change from rates last adjusted in 2018.

Why it matters: financing and rate decisions affect both the timing of critical water and sewer upgrades and monthly bills for residents and businesses. Council members expressed concern about relying heavily on impact fees or on a single financing approach while growth rates remain uncertain.

Staff presentation and numbers City consultants and staff outlined a financing timeline and revenue analysis. Staff estimated the rate package would add about $1,100,000 in annual revenue — which staff described as roughly a 37% increase in water and sewer revenues under the proposed structure. Using a…