Arvada reviews plan for steep utility rate increases, outlines bond spending and assistance options

Jacqueline Rhodes, a member of the city’s utilities staff, opened a May 13 Arvada City Council workshop on proposed 2026 water, wastewater and stormwater rates and fees, saying, “We’re here tonight to listen.”

The presentation laid out the utilities’ 10-year capital plan, recent project completions, and financing strategy, including a $90 million revenue bond program the city is advancing this year and modeled future borrowings for 2027 and 2029. Staff said the 2025 bond proceeds would be spent within about 36 months on large projects such as water-line replacements and the Arvada water treatment plant replacement, currently in design with construction planned to begin in 2027.

Why it matters: The staff presentation and council discussion framed the work as an attempt to avoid system failure, regulatory noncompliance and public-health risks while balancing affordability for ratepayers. Council members repeatedly pressed for clearer comparisons showing dollar impacts on households, more historical context about deferred maintenance, and options that pace construction to limit near-term rate shocks.

City staff summarized system needs and recent work. Mary Stahl, the utilities engineering manager, said master planning completed through 2022 identified widespread needs: treatment-plant work, distribution piping and storage, interceptor repairs and stormwater upgrades. Stahl described recent progress on several large projects and said some major sewer segments are in construction and others will be “in warranty within a couple of weeks.” She also said past bond proceeds (2022 issuances of $50 million for water and $50 million for sewer) have funded a mix of growth-related and repair-and-replace projects.

Finance and rate modeling: Chris Gray, the city’s business manager, reviewed historic and projected rate charts staff presented last fall. Staff said the council adopted a 2025 rate package last year that anticipates debt service for roughly $90 million in revenue bonds. Staff told council members the 2026 model in the presentation showed a projected next-year increase roughly in the neighborhood of 11% (staff cited “about 11.29%” when asked) to cover existing and newly issued debt service; additional modeling assumed further debt issuances in 2027 and 2029 that were included in the long-range scenario.

Councilors raised affordability concerns and asked for alternatives and clearer tradeoffs. Council member Pfeiffer warned that compounding double-digit increases could make bills “unaffordable,” saying, “if you think about 2030, ’32, and what we pay today, and you do 10% on top of 10% … it's gonna be unaffordable to even have water.” Council member Marriott asked staff whether the financial plan and the construction schedule were “in sync,” noting collecting money before projects are ready can push rates up sooner than necessary. Staff said they are pursuing contracting approaches such as CMGC (construction manager/general contractor) and early contractor involvement to improve schedule and estimate certainty and to better align spending with revenues.

Scope and priorities: Staff described how they prioritize projects with a color-coded criticality list (red = most critical), and offered to return to council with scenarios that fund only red projects, red+orange, or all three tiers so council can weigh the rate impacts and the consequences of delaying projects. Staff also reported differences between funds: the water fund has many growth-related projects while the wastewater fund includes more repair-and-replace needs.

Assistance programs and collections policy: Staff summarized customer assistance options, including payment plans, bill-equalization plans, and hardship credits (staff reported 23 hardship credits in 2024). They said federal pandemic-era assistance programs ended in 2024 and that the city is exploring referral pathways with community partners and using the city’s resident rebate list to contact potentially eligible customers. Staff said they will return to council with more detail about reinstating a shutoff program and the code language that governs the process; they reported the shutoff pause began during the COVID-19 pandemic and that other Front Range utilities have resumed shutoffs. Utilities services manager Debbie Baumconner described shutoffs as effective in prompting payment in past use but noted reinstatement has operational and equity implications staff would model.

Board direction and requests: Council asked staff to bring back: - Pumped-zone analysis showing the cost to serve pumped zones vs. gravity distribution and options for surcharges or fee structures (Council member Marriott and others requested detail on both water and wastewater lift-station impacts). - A clearer set of rate scenarios tied to project packages (red / red+orange / all) with dollar impacts on a typical single-family bill and a line-item connection between the color-coded project list and the rate charts. - More historical context on deferred maintenance and prior funding choices so the public can see why the backlog exists. - Detailed proposals and empirical data about reinstating shutoffs, including operational impacts and consequences for households in arrears. - More detail on assistance-program outreach, potential “round-up” or donation programs, and how software updates planned for 2027 could support those options.

Near-term schedule: Staff said this workshop is the first of a series and that they plan additional workshops in July, August and September, with rate-and-fee adoption scheduled to accompany the city budget hearings in October. Staff also noted that second-reading for the 2025 bond series is pending next week.

What staff emphasized: “We want to start this process early … so that you have the information needed to make your decisions,” Rhodes told council. Mary Stahl urged council to recognize the complexity of construction in congested areas and permitting challenges; she described several major sewer projects as being actively under construction or in warranty and noted the city is using multiple contracting strategies to reduce schedule risk.

Outcomes: The workshop produced no formal votes. Council provided direction for staff to return with the analyses and scenario detail above; staff confirmed the next workshop is scheduled for July 1 and said they would incorporate council feedback into materials for subsequent sessions.

Ending note: The presentation repeatedly framed the choice as balancing infrastructure risk, regulatory obligations and household affordability; council members expressed shared interest in pacing projects and debt to limit rate shocks while protecting public health and system resilience.