Boulder utilities staff outline 6‑year capital improvement plan and propose 2026 rate increases

City of Boulder utilities staff on Wednesday presented a six‑year capital improvement program (CIP) that prioritizes rehabilitation of aging water, wastewater and storm‑and‑flood systems and recommended a set of rate increases to help pay for the work.

At a meeting of the Utilities Advisory Board, staff described a large backlog of capital needs across roughly $3 billion in utility assets and said they are trying to balance increased reinvestment with measured, predictable rate changes to avoid abrupt spikes for customers. Stephanie Klingman, the city’s principal financial analyst, proposed an 8% increase in water rates, a 6% increase in wastewater rates and a 5% increase in storm/flood rates for 2026, with additional proposed increases in 2027–28 (8% for water and wastewater; 7% for storm/flood).

The board was shown how the utilities prioritize projects using an asset inventory and condition‑index process intended to “flatten the decline” in system condition by lifting the scores of the highest‑risk assets through targeted rehabilitation and replacement. Chris Douglas, the city’s chief engineering manager for utilities, described programs and near‑term projects meant to address those priorities, including pipe relining, key transmission pipelines and improvements at treatment facilities.

Staff highlighted several water‑system projects that are already underway or in design: Barker Grama pipeline work and associated siphon replacements (staff said the Barker Grama program will need roughly $5 million per year over several winters to complete about 14,000 feet of pipeline and siphons), monitoring and targeted work at high‑hazard dams driven by updated state engineer standards, and ongoing corrosion and disinfection upgrades at the Potassa Water Treatment Plant and Boulder Reservoir treatment facilities. “We are trying to avoid rate spikes while maintaining system reliability,” Douglas said.

On wastewater, staff emphasized a long‑running sanitary sewer lining program that began after the 2013 flood and is intended to accelerate pipe rehabilitation citywide, plus planned work on the Lower Goose Creek interceptor and projects at the Water Resources Recovery Facility (WRRF). Douglas and wastewater engineering staff said the WRRF will need HVAC and hot‑water‑loop upgrades; staff noted that cost estimates for that project have risen significantly since earlier planning and additional funds are being requested in 2026.

For storm and flood, the presentation highlighted the South Boulder Creek flood mitigation project — described as an earthen dam, concrete flood wall along U.S. 36 and an outlet structure — with an estimated construction cost of about $66 million and a planned bid release in the coming weeks. Staff also described Gregory Canyon (designed to roughly the 25‑year storm in constrained reaches) and an Upper Goose Creek package that combines local storm‑sewer improvements with downstream flood capacity work.

On financing, Klingman described the utilities’ revenue mix (primarily user fees, supplemented by municipal bonds and occasional state or federal assistance), reserves policy and metrics the city uses to judge financial health. She told the board the wastewater fund’s ending balance will decline in 2025 as major projects complete but remains manageable within the long‑term plan. Staff said bonding is the primary means to finance large projects; issuing bonds allows costs to be spread over time and avoids extremely large one‑ or two‑year rate jumps. "If we did that type of a major rate increase ... it would require, like, 2 years of roughly 70 or 80% rate increases," one staff member said as an example of the alternative to bonding for a major project.

Board members pressed staff to emphasize near‑term projects when presenting and asked for clearer, annual check‑ins on whether the proposed rates are keeping pace with the asset‑management goals. Several board members raised affordability concerns and asked staff to continue strengthening customer assistance programs. Klingman said the utilities track operating reserves, a water resilience reserve and other capital reserves; staff emphasized they plan to expand affordability efforts and to continue looking for targeted outside funding where feasible.

The board asked for additional detail on a few specific items: how contingency and construction escalation are being applied (staff said a 4% annual cost escalation assumption is applied across projects and contingency levels shrink as designs advance), how projects are sequenced when funding is limited, and why some dam projects are being handled via monitoring and targeted repairs instead of large capital reconstructions (staff said state dam‑safety guidance and expert recommendations sometimes point toward monitoring and phased work rather than immediate full reconstruction).

Staff said the board will be asked in July to recommend the CIP and the rate proposals to City Council; the utilities director said staff will return with a revised CIP and any refinements based on board feedback. The presentation materials also indicated later meetings will address water supply policy, graywater policy and water‑wise landscaping code updates.

Votes at a glance: the board approved the April meeting minutes earlier in the session and later moved to adjourn; both routine motions passed by voice vote.