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Vermillion council approves wastewater rate hike and authorizes revenue bond to finance treatment-plant work
Summary
The City Council approved increasing wastewater billing rates to meet loan conditions and authorized up to $23.1 million in revenue bonds to finance planned wastewater treatment plant improvements, with new rates scheduled to take effect in April 2027.
The Vermillion City Council voted to raise wastewater billing rates and to authorize revenue bonds to fund major wastewater treatment plant improvements.
City staff said the wastewater treatment upgrades are expected to cost as much as $23,100,000 and that the state requires rates to be raised to secure the loan. Administration recommended increasing wastewater charges to 211 percent of benchmark rates; staff projected that change would raise the monthly bill for the average user from $52.56 to $65.23—an increase of $12.68 per month for a household using 581 cubic feet (about 4,346 gallons). Officials said the rate change will not appear on customer bills until the April 2027 billing cycle. The city said rates can be reduced in April 2027 if the full loan amount is not borrowed.
Councilors approved a resolution authorizing up to $23,100,000 of revenue bonds so the city may draw the loan line of credit; staff said the full amount may not be needed and the final rate will be adjusted to match the actual amount borrowed. The loan was described as a 30-year financing at about 3.25 percent; staff also noted they are pursuing a $5,000,000 Economic Development Administration loan/grant to reduce borrowing needs.
In discussion, council members and staff emphasized the timeline: construction is expected to finish in October 2027 and the April 2027 bill is the planned implementation point for rates tied to the assumed borrowing. Council members asked about alternatives to borrowing the full amount; staff and councilors said finding cost reductions or borrowing less would lower the required rate increase.
The council approved both measures by voice votes. The motion to adopt the recommended wastewater rates was moved by Councilor Murrah and seconded by Councilor Holland; the motion carried. The subsequent resolution to authorize revenue bonds was moved by Councilor Cheeseman and seconded by Councilor Toller; the motion carried.
The council and staff said the city will adjust the rates and the debt service schedule based on the final loan draws and any outside funding obtained during construction.
