Board reviews proposed 2026 budgets: water, sewer and stormwater plans and rate guidance

Utility staff presented the proposed 2026 budgets for the Water, Sewer and Stormwater enterprise funds at the June 10 meeting and explained how multi‑year capital plans, federal and state loans, and rolling project timelines affect rates and fund balances.

Peter (first name only in the transcript), who said he splits time as director of utilities and director of South Platte Renew, reviewed the water fund. He said the water fund serves about 34,000 residents and 2,100 businesses and that the utility’s strategy focuses on modernization projects (including City Ditch piping) to improve taste, odor and hardness, and to increase system resiliency. He said the proposed 2026 total budget for the water fund was about $51 million (down from an earlier $53 million projection) reflecting timing changes in capital execution. Peter said the utility anticipates drawing WIFIA funds over multiple years and that slowing draws reduces interest accruals; he noted the WIFIA funds allow flexible draw timing to limit interest costs.

Peter reiterated the lead-service-line replacement program is underway: staff reported they had passed the 1,000 service‑line replacement milestone and estimated an inventory of about 2,800 lead lines system-wide. He said, based on current production, the program might complete in roughly 18 months.

On rates, Peter said staff recommends a 4.5% annual increase consistent with the utility’s financial model; for a typical Englewood residential user that equates to about $1.08 per month. He said connection fees and the drinking-water loan fee are handled per the financial plan: the drinking-water loan fee approved last year is projected to remain $5 for the life of the fee.

On the sewer fund, staff presented a proposed 2026 budget of about $27 million (an 8% reduction from 2025 amended levels), driven in part by timing of capital projects and debt-service adjustments. Staff reported an unanticipated positive development: a roughly $4 million credit to the city’s portion of an existing loan associated with South Platte Renew that the board was told will improve sewer fund debt-service planning. Staff cautioned the long-term capital need for the sewer fund grows in later years and said the fund remains stable for the near term.

Victor Rochelle, director of public works, briefed the board on stormwater. The stormwater fund brings in roughly $3.7 million in user fees; staff proposed a 2026 stormwater maintenance fee increase of 4.5% (roughly under $1 per typical account), which staff estimated would generate about $165,600 for the fund. Victor noted capital spending declines in 2026 compared with prior years because the South Englewood flood reduction and Old Hampden utilities projects are completing.

Peter and Victor emphasized that many capital figures reflect timing—projects in design and procurement that move into construction over several years—and that delaying draws on WIFIA funds reduces interest accrual. Staff said the multi-year “mountain graph” of capital spending is entering a peak execution window now and will decline later in the decade as project delivery concludes. Board members asked clarifying questions about budget execution rates and debt assumptions; staff said they will continue to refine the multi-year plan and report back as bids and schedules firm up.

Why this matters: the presentation frames rate guidance, capital spending and financing choices that affect utility bills and the pace of infrastructure investment. The board did not take final rate action at the June 10 meeting but discussed planned rate increases and funding assumptions ahead of the council process.

Staff said the proposed budgets will be part of the city’s council deliberations in coming weeks and that the utility will return with further refinements.