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Consultants say Westminster sewer fund under-recovering; present rate-restructuring options
Summary
Consultants from Rattellus told Westminster City Council a detailed wastewater financial plan shows the sewer fund is not covering full costs and offered rate-design options including a one-time large increase or a five-year 7.2% annual path; council directed staff to fold the consultant rate design into the proposed budget.
Consultants from Rattellus told the Westminster City Council on May 13 that the city's sewer fund is not recovering its full costs and presented alternative rate pathways to remedy a forecast shortfall.
The firm's representatives said the sewer fund currently collects roughly $970,000 in revenues but must also contribute roughly $200,000 toward shared administrative costs and its share of debt service. "If we wanted to be in a good spot on our debt service coverage, and we wanted to cover all of these costs right out of the gate, we would have to raise rates by 27 and a half percent in 2026 and then 5% in '27," Rattellus consultant Will said during the presentation. He and colleague Barrett offered a second option: smooth the recovery over five years with an approximately 7.2% increase each year.
Why it matters: the sewer fund is an enterprise fund that must be self-supporting. Council members and staff said under-recovery has been masked in part by transfers from water and electric funds. Kevin (city staff) told the council the water and electric funds have been standing in for sewer when it fell short.
Rattellus also highlighted an unintended result of a recent change in wholesale billing by Oconee Joint Regional Sewer Authority (OJ RSA). Consultants showed that after OJ RSA changed how it bills (a per-customer base plus volumetric charge), Westminster's existing local rates had become unbalanced: "You're charging some classes less than what you pay Oconee for them," Will said, noting some nonresidential classes leave the city keeping only "71' cents per thousand gallons." The consultants recommended restructuring base and volumetric elements so the city retains similar per-thousand-gallon revenue across customer classes.
Technical and timing details: Rattellus used a five-year financial forecast that assumes roughly 1,100 current sewer customers and about 500 additional customers over five years; the firm used the city's preliminary FY2026 operating budget and assumed routine O&M escalation. The consultants also included a scenario that accounts for an expected 5% volumetric increase from OJ RSA in FY2026.
Council action: after discussion, the council amended the FY2026 budget first reading to instruct staff to incorporate the Rattellus rate structure into the proposed budget (see related article on the FY2026 budget). City staff said they will return revised rate and budget numbers for second reading.
Ending note: Consultants emphasized two choices: a large near-term correction or a phased, multi-year approach. Council members asked for additional comparative billing data and asked staff to run the consultant-designed rate schedule against the proposed budget.
