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Board hears 15‑year financial plan: 4.5% annual rate forecast, SRF/WIFIA loans and $5 monthly lead‑loan fee proposed
Summary
Staff and consultant Stantec presented a multi‑year financial plan for Englewood’s water and sewer funds that relies on WIFIA and SRF loans, projects about $100 million in capital work over five years, and forecasts 4.5% annual rate increases plus a $5 monthly drinking water loan fee to fund lead line replacement.
The Englewood Water and Sewer Board received a detailed financial planning briefing on May 12 outlining revenue, rate and borrowing strategies to fund an accelerated capital program including a lead‑service line replacement effort.
Peter (staff) introduced Stantec financial modeling consultant Carol Moleski, who reviewed the planning framework the utility uses to match revenue with obligations. Moleski said the analysis asks three core questions: how much revenue is needed, from whom to collect it, and how to collect it. She described revenue requirements as covering operations and maintenance, debt service, minimum operating reserves and capital improvements.
Staff described a multi‑pronged funding approach combining rates, a capital improvement fee, connection and miscellaneous fee updates, grants and loans. Peter summarized recent financing steps: the city closed WIFIA loans in April–May 2022 at under 3% interest and obtained $10 million in bipartisan infrastructure law grant funding through the state SRF process; those actions accelerated the lead program and reduced near‑term borrowing needs.
Carol Moleski said the water fund financial plan uses assumptions including 4.5% annual rate increases and partial execution of budgets (forecasting that not all budgeted capital and operating funds will be spent in the year budgeted). She said a proposed drinking water loan fee of $5 per account per month would be implemented at the end of 2025 and remain stable for the life of the loan to pay associated debt service. The capital improvement fee was shown rising from $16 toward $26 by 2034 under the current plan.
On the sewer side, staff recommended maintaining a minimum operating reserve target equivalent to six months of operating expenses (up from a lower historical target) because South Platte Renew is a regional facility and the sewer fund covers Englewood’s share of major plant costs. The board was told the sewer financial plan also assumes 4.5% annual rate increases and that WIFIA funding materially reduced the need for immediate borrowing; however, additional borrowing for South Platte Renew projects is forecast beginning about 2029–2030.
Board members asked about rate structure changes for high water users and billing cadence for connector districts. Peter said the utility still operates a declining block rate structure and intends to move to an inclining block structure within about two years; staff also noted connector districts are currently billed annually and the districts have requested monthly billing.
Board members expressed concern about affordability; staff noted that the 4.5% annual increases translate to roughly $1.10/month on water and $1.30/month on sewer for a typical household, and that the city’s bills remain low relative to many neighboring utilities. Staff said they would present the same financial briefing to City Council on May 19 and continue to refine capital execution and funding plans.
